The government is preparing to introduce income limits for its new first-time buyer support programme, with households earning up to £110,000 eligible to apply outside London and those earning up to £140,000 able to participate in the capital. According to BBC News, the Your First Home scheme will offer government-backed equity loans covering 20% of the purchase price for new-build properties acquired from participating developers.
As first reported by The Times, the higher threshold for London reflects the capital's elevated property costs and the need to support middle-earning professionals in the region. The scheme will enable first-time buyers to purchase homes with deposits as low as 2.5%, with loans also featuring an initial interest-free period.
Prime Minister Andy Burnham unveiled the Your First Home scheme at the Labour conference last month, emphasising that it would target those who "really need support". The government has acknowledged that previous first-time buyer schemes without income restrictions attracted criticism for inflating house prices by enabling relatively affluent households to access additional borrowing capacity.
The London Chamber of Commerce and Industry has raised concerns about the income thresholds, warning that an earnings cap could exclude London teachers and nurses near the top of their pay bands and discourage workers from accepting pay rises. The organisation noted that the previous Help to Buy scheme operated without income restrictions, allowing a broader range of earners to participate.
Ministers initially considered setting earnings limits at £90,000 for properties outside London and £110,000 in the capital, but concluded these thresholds would deny access to too many middle-income couples. The government has also argued that the scheme will stimulate housebuilding activity, after acknowledging it is on track to miss a target of constructing 1.5 million homes in England by the next election.
How will the scheme work?
The Your First Home scheme operates through equity loans linked to changes in property values. Participating developers are expected to pay a fee related to property values to help cover scheme costs, and the government says the scheme is intended to help buyers without access to family financial support purchase a modest new-build home.
The scheme mirrors the structure of Help to Buy, the Conservative-Liberal Democrat coalition initiative that ran between 2013 and 2021. That original programme allowed all home purchasers to place a 5% deposit on newly constructed properties valued up to £600,000, with up to 20% of the purchase price funded through a shared equity loan that remained interest-free for the first five years.
A second iteration of Help to Buy operated from 2021 to 2023, restricting eligibility to first-time buyers and applying regional price caps to properties purchased under the programme. The new Your First Home scheme builds on this model while introducing income-based eligibility criteria designed to target support more precisely.
How will the scheme be funded?
Labour has stated that the Your First Home scheme will be funded from within existing government budgets, though the party has not yet disclosed which other spending areas will see reductions to accommodate the initiative. Developers participating in the scheme will also contribute towards operational costs, spreading the financial burden beyond the public purse.
What happens next?
Chancellor John Healey is due to set out the scheme's full details at the Autumn Budget on 28 October 2026, when the government will confirm the final earnings limits and other eligibility criteria. Pre-registration is expected to open by the end of 2026, though the scheme will not yet be accepting applications at that stage.
