Your First Home scheme to offer 20% equity loans on new-build homes in England

The government plans to offer first-time buyers in England government-backed equity loans worth 20% of new-build homes bought from participating developers, under a scheme called Your First Home.

An equity loan is a government-backed loan that helps a buyer fund part of a home purchase. Under the plans, the loans will carry an initial interest-free period, according to the BBC. The scheme is designed to allow home purchases with deposits as low as 2.5%.

Households earning up to £110,000 are expected to be allowed to apply, the BBC reported. A higher earnings limit of £140,000 is expected to apply to purchases in London. These figures are not yet confirmed.

Details of the scheme, including the salary caps, are due to be confirmed at next week's Budget, the BBC said. In September, the government published an announcement on gov.uk under the heading "New first-time buyer scheme to be confirmed at Budget", which set out the same timetable.

The new scheme should not be confused with the government's existing First Homes scheme. Gov.uk describes that scheme as one in which first-time buyers may be able to buy a home for 30% to 50% less than its market value. The purchased home must be the buyer's only or main residence.

The Your First Home plans apply to England only. Housing is a devolved matter, which means the Scottish Parliament, the Senedd in Wales and the Northern Ireland Executive set housing policy for their own nations.