27/09/2026
Andy has just announced a 2.5% deposit, which could dramatically lower the biggest barrier facing many first-time buyers: the upfront cash needed to get on the ladder.
Under the proposed Your First Home scheme, a £200,000 home could require just £5,000 from the buyer, while a £400,000 home would require £10,000.
But a smaller deposit doesn’t automatically make a home affordable.
The upside:
• Far less time needed to save a deposit
• Could help buyers without access to the “Bank of Mum and Dad”
• Government equity support reduces the initial mortgage required
• Could open homeownership to more first-time buyers
The downside:
• The government takes an equity stake in the property
• Buyers still need to pass mortgage affordability checks
• A 2.5% deposit leaves buyers with very little initial equity of their own
• The scheme is focused on eligible new-build homes
• Income limits and local property price caps still need to be confirmed
The deposit problem may become smaller. The affordability problem remains.