Chancellor John Healey's Autumn Budget has set out new support for first-time buyers, including a £4.7 billion equity loan scheme, changes to Lifetime ISA withdrawal charges and a new savings account. Some of the measures will only become available in 2027 or later.
Your First Home scheme
The largest new measure is the Your First Home scheme, expected to help around 70,000 households in England get on the property ladder. The scheme will not be available in Scotland, while the announced savings changes will apply to eligible first-time buyers across the UK.
The £4.7 billion scheme will offer equity loans worth 20 per cent of a property's purchase price to eligible first-time buyers in England. Household income will be capped at £110,000 outside London and £140,000 in London.
Property price limits will be based on local authority median prices, with caps of £650,000 in inner London and £500,000 in outer London. Buyers will need a deposit of at least 2.5 per cent, with a maximum deposit of 15 per cent under the scheme. The equity loan will have a five-year interest-free period.
Pre-registration is expected to open by the end of December 2026, followed by full applications in February 2027. The first loans are scheduled to be issued from April 2027. Full details can be found on GOV.UK.
Lifetime ISA withdrawal charge changes
People saving for their first home can currently put up to £4,000 a year into a Lifetime ISA and receive a 25 per cent government bonus, worth up to £1,000 annually. The existing rules impose a 25 per cent withdrawal charge if money is taken out for a non-qualifying purpose, including buying a home costing more than £450,000.
From October 29, 2026, the UK Government will reduce the withdrawal charge to 20 per cent for purchases above the £450,000 property cap that otherwise meet the qualifying rules. The change means savers will lose the government bonus but retain their own contributions, rather than facing the existing higher penalty.
HMRC figures show £118,985,000 was recorded in Lifetime ISA withdrawal charges during 2025/26.
New First-Time Buyer ISA from April 2029
A new First-Time Buyer ISA will be introduced in April 2029, replacing the Lifetime ISA for new savers. People will be able to contribute up to £4,000 annually and receive a 25 per cent government bonus, subject to an overall maximum of £20,000.
Unlike the Lifetime ISA, the bonus will be calculated on the final account balance when money is withdrawn for an eligible first-home purchase. This means interest or investment growth within the account will also count towards the bonus calculation.
The new account will be available to people aged 18 or over, without the Lifetime ISA's upper age limit of 39 for opening an account. The maximum qualifying property price will remain £450,000. Existing Lifetime ISA holders will not be able to transfer their savings directly into the new First-Time Buyer ISA, although both accounts can be used towards the same property purchase.
Additional funding for affordable homes
The Budget also announced an additional £1.5 billion to deliver around 10,000 homes in England. Funding will be prioritised for social rent, particularly council housing, taking total planned investment in the social and affordable homes programme to more than £40 billion over 10 years.
According to Rightmove, the average asking price for a typical first-time buyer property across Britain was £225,627 in October, down 0.5 per cent compared with a year earlier.
