The government’s Your First Home scheme could save first-time buyers almost £21,500 over the first five years of homeownership, research shows.
Analysis by UK Property Development (UKPD) also found the scheme would cut the upfront deposit requirement by half.
The government announced plans for the new first-time buyer scheme on 26 September. Full details are expected to be unveiled in the upcoming Autumn Budget.
Under the proposed scheme, first-time buyers purchasing a new-build property could be able to secure a home with a deposit of as little as 2.5%, alongside a government-backed equity loan worth 20% of the property’s value.
UKPD has modelled the potential impact of the scheme based on a number of assumptions, as several details have yet to be confirmed.
The analysis assumes the scheme will retain two key features of the former Help to Buy equity loan programme: qualifying property price limits equivalent to 1.5 times the average first-time buyer property price and a five-year interest-free period on the government-backed equity loan.
Based on those assumptions, UKPD estimates that the maximum qualifying property price in England would be £368,273, calculated using an average first-time buyer property price of £245,515.
For a buyer purchasing at this price, a 2.5% deposit would amount to £9,207, while the 20% government equity loan would provide a further £73,655.
The remaining £285,411 would be covered by a mortgage, equivalent to 77.5% of the property’s value.
Using a current average first-time buyer mortgage rate of 4.49% over 25 years, UKPD estimates that monthly repayments would be approximately £1,585.
Over the five-year interest-free period, this would result in total mortgage repayments of around £95,087.
By comparison, a buyer purchasing without the proposed scheme would need to provide a minimum 5% deposit and take out a mortgage covering 95% of the property’s value.
UKPD estimates that Your First Home could therefore reduce the initial deposit requirement by at least 50%, while cutting monthly mortgage repayments by approximately £358.
Over five years, the research puts the potential overall saving at £21,471.
The potential impact of the scheme comes as first-time buyers continue to represent a significant proportion of the UK housing market.
UKPD estimates that first-time buyers accounted for 52.8% of all mortgages provided across the UK in 2025.
Their importance to the market was also demonstrated by the previous Help to Buy scheme. Between April 2013 and May 2023, 328,346 first-time buyers used the government-backed equity loan programme.
UKPD believes the new scheme could similarly stimulate demand for new-build homes, but warns that increasing buyer demand could create pressure on housing supply.
Andy Morrison, director of UK Property Development, said the scheme could have a “enormous impact” on the new-build market by driving a surge in demand from first-time buyers.
“This is, on the surface, excellent news for the economy, the housing market, and developers, not to mention the buyers themselves,” he said.
“However, will there be enough homes available to satisfy this demand? Because if not, the potential benefit of the scheme will be significantly muted.”
Morrison said the government would also need to find effective ways of encouraging developers to increase housing delivery and participate in the scheme.
He argued that while larger developers could be reluctant to accelerate construction, smaller and medium-sized developers could play an important role in meeting additional demand.
“Meanwhile, SME developers will almost certainly pick up the slack. Those who are operating on a smaller scale are less concerned with landbanking and more concerned about delivering great homes to parts of the country where people are calling out for them.”
The government is expected to provide further details of Your First Home in the Autumn Budget, including confirmation of eligibility criteria, property price limits and the terms of the proposed equity loan.
