Full Breakdown
Your First Home: New Equity-Loan Scheme Aims to Boost First-Time Buyers Amid Rising Landlord Taxes
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In this breakdown
01
Core Event – Budget Introduces First-Buyer Support and Landlord Tax Hike
On 28 October 2026 the Chancellor delivered the Autumn Budget, announcing a £4.7 billion “Your First Home” equity-loan programme for first-time buyers in England. The scheme offers a 20 % government-backed loan, an interest-free period of five years and a minimum deposit of 2.5 % of the purchase price. The Budget also confirmed a further 2-percentage-point rise in tax on rental income from April 2027, taking landlord rates to 24 % (basic), 44 % (higher) or 49 % (additional).
02
Background & Context
The measures extend the Help to Buy legacy and the Lifetime ISA (LISA). Earlier this year the Renters’ Rights Act tightened tenancy rules, making the new tax increase the second consecutive move targeting landlords while providing fresh demand-side support for buyers without parental assistance.
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Data & Statistics
- Funding: £4.7 billion over five years.
- Deposit: 2.5 % of price (maximum 15 %).
- Equity loan: 20 % of price, interest-free for five years, then 1.5 % (year 6) and 3 % (year 7 onward).
- Income caps: £110 000 outside London, £140 000 inside London.
- Price caps (examples): £650 000 (inner London), £500 000 (outer London), £375 000 (Reading), £355 500 (Manchester).
- Landlord tax bands: 24 %/44 %/49 % from April 2027.
- Additional housing investment: £1.5 billion for the Social and Affordable Homes Programme, targeting roughly 10 000 new homes.
04
Official Statements & Responses
Chancellor John Healey called the programme “hope-starting,” saying “hope starts with a home… delivered to the British people by this Labour government.”
Sam Ingram, Equity Director at Davisons Law, said the reduced deposit “could be a real game-changer” for buyers without family support, while urging applicants to understand repayment terms.
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On-the-Ground Reports
Ryan Etchells, chief commercial officer at mortgage lender Together, identified a “triangle of challenges” for first-time buyers: saving a deposit, affording mortgage repayments and a shortage of housing supply.
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Conflicting Reports & Gaps
The government released example price caps but did not publish a complete list of local-authority caps, leaving buyers uncertain about eligibility in many regions. The scheme is limited to new-build homes, though some commentators suggest future extensions to existing properties.
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What’s Next
- Pre-registration: Opens by the end of December 2026.
- Applications: Open from February 2027.
- First loans: Expected in April 2027.
- Lifetime ISA changes: Effective 29 October 2026, reducing the withdrawal charge to 20 % for purchases above the £450 000 cap.
- VAT on land for social housing: Zero-rated from 1 April 2027.
- Temporary electricity VAT cut: Continues until 1 July 2027.
These timelines set the immediate horizon for prospective buyers and signal the government’s intent to balance housing demand with fiscal constraints.