First-time buyer changes after the 2026 Budget: what to know

The Budget on 28 October 2026 made three changes for first-time buyers. It confirmed Your First Home, an equity-loan scheme for new-build homes in England with a deposit from 2.5%. It cut the Lifetime ISA withdrawal charge to 20% for first homes over £450,000, from 29 October 2026. And it announced a new First Time Buyer ISA from April 2029. Stamp duty relief for first-time buyers looks the same as before: the GOV.UK rates page still shows no tax up to £300,000.

This is general information, not financial or legal advice. GOV.UK says Your First Home applies to England. Many scheme details are still to be published.

Your First Home: what it is

GOV.UK describes it as "a new government scheme to help first-time buyers purchase a new-build home with a smaller deposit and mortgage". The Budget confirmed £4.7 billion for it, with the aim of helping 70,000 households onto the ladder. The scheme page says that money runs over 5 years, with £700 million in 2027 to 2028 and £1 billion in each year after.

You put together three parts, per GOV.UK:

• a deposit of at least 2.5% of the price
• a repayment mortgage from a participating lender
• a government equity loan worth 20% of the price, interest free for 5 years

After that, the loan starts to charge interest. The published schedule is:

You own the home outright from completion. In GOV.UK's words, "The government will not be a joint owner or your landlord."

Who can use it

According to the scheme page, you must:

• be a first-time buyer
• buy a new-build home in England, within the local price cap
• live there as your main home
• have a total household income of £110,000 or less outside London, or £140,000 or less within London
• get a mortgage from a participating lender

Price caps vary by area. GOV.UK gives examples: inner London £650,000, outer London £500,000, Manchester £355,000, Reading £375,000, North Devon £320,000 and Middlesbrough £220,000. A full list by local authority is due "shortly". Full eligibility rules are also still to follow before applications open.

A worked example: a £300,000 new build

This is GOV.UK's own illustration:

Without the scheme, GOV.UK says a buyer with a standard 95% mortgage would typically need a £15,000 deposit and a £285,000 mortgage. So the scheme halves the deposit in this example.

GOV.UK also shows monthly costs, based on a 30-year repayment mortgage at 5%. It is an illustration only, and real rates will differ.

One point to understand before you sign. The loan is a share of the home's value, not a fixed sum. GOV.UK says "the amount you repay can go up or down as the value of your home changes". If the home rises in value, you pay back more than £60,000. If it falls, you pay back less.

Key dates

• Now: applications are not open yet.
• Before the end of 2026: GOV.UK says pre-registration will open before the end of the year. It does not commit you to buying through the scheme, but it should tell you more about your eligibility and the price cap in your area.
• February 2027: the scheme is expected to open for applications.

Lifetime ISA: a smaller charge above £450,000

The Lifetime ISA has a £450,000 price cap for first homes. Until now, buying above it meant a bigger penalty. From 29 October 2026, HMRC says the charge on these withdrawals is 20%, which lets savers "retain their own contributions while removing the government bonus". The 25% charge still applies to other unauthorised withdrawals.

The current GOV.UK guidance now reads: "If the property costs more than £450,000, you'll pay a 20% withdrawal charge. There's no withdrawal charge for properties costing £450,000 and under."

The other first-home rules still apply. You must buy at least 12 months after your first payment in, use a conveyancer or solicitor (the provider pays them directly), and buy with a mortgage.

The new First Time Buyer ISA from April 2029

The Treasury's consultation response (October 2026) sets out the plan. It will be offered in place of the Lifetime ISA, and existing Lifetime ISAs opened before then can carry on under the current terms.

What we know so far, from the same document:

• you can pay in up to £4,000 a year
• a 25% government bonus, up to £20,000 in total, worked out on the final balance and paid when you withdraw for an eligible first home
• a £450,000 property price cap
• you must be 18 or over to open one, with no upper age limit
• you must hold it for 1 year for the bonus, and buy with a mortgage
• one First Time Buyer ISA at a time
• Help to Buy ISA balances can move in between 6 April 2029 and 1 December 2030
• you cannot transfer a Lifetime ISA into it, but you can use both towards the same purchase

Stamp duty for first-time buyers

The GOV.UK rates page, as read on 2 November 2026, still shows this first-time buyer relief:

Standard rates on the same page are nil up to £125,000, 2% from £125,001 to £250,000, and 5% from £250,001 to £925,000. Relief only applies if you and anyone you are buying with are first-time buyers.

What to do now

1. Check your numbers against the caps. Compare your budget with the local price cap once the full list is out, and your household income with the £110,000 or £140,000 limit.
2. Pre-register when it opens. It does not commit you, and it should confirm your eligibility and local cap.
3. Talk to a mortgage adviser. Ask which lenders are taking part and what the equity loan means for you in year 6 and beyond.
4. Check your Lifetime ISA dates. If you plan to use one, make sure your first payment was at least 12 months before you buy.
5. Prepare for new-build viewings. Ask whether the developer is in the scheme, when the home will be finished and what is included.

Where to check, and a word of caution

Your First Home is new-build only and England only. The full price cap list, eligibility rules and participating developers and lenders are still to be published. Check the Your First Home page and the Lifetime ISA guidance before you act, and get personal advice for your situation.

While the details land, you can still start looking. VistaMove lets you search homes for sale across the UK's big property sites at once, keeps each agent's reply in one place and tracks the viewings you add, so you are ready when applications open.