Burnham’s 2.5% deposit offer leaves buyers waiting on the debt terms

• Your First Home would let first-time buyers in England purchase a new-build home with a 2.5% deposit and a government equity loan worth up to 20% of the property’s value. The loan will be interest-free at first, but the length of that period and what follows have not been set out.¹
• The scheme is intended for buyers without family help. It will have household-income and local property-price caps; ministers have not published the figures.¹
• Chancellor John Healey is due to give more details at the Budget on 28 October. The government has not announced the scheme’s total budget or how many buyers it expects to help.²
• Registration is expected to open by the end of 2026. The scheme is to be funded by reprioritising existing government budgets, with developers also paying towards running costs.¹

The missing terms matter because this is not simply a smaller deposit: buyers would take on a government stake in a new-build home, alongside their mortgage. Until the repayment and later interest rules are clear, buyers cannot judge the full cost or risk. Nor can taxpayers see what existing spending might be diverted to pay for it.¹

There is a reason to scrutinise the design. A government evaluation of the earlier Help to Buy scheme found it was likely to have contributed to rising house prices; buyers using it also paid around 1% more, on average, than buyers of similar new-build homes. That does not establish what this scheme will do, but it makes the case for the promised caps and a clear account of how much extra building the subsidy will actually produce.³

Footnotes

1. The Guardian’s report on the scheme. ↩ ↩² ↩³ ↩⁴

2. The Independent’s report on the Budget timetable. ↩

3. MHCLG’s evaluation of Help to Buy and its effect on house prices. ↩