UK government to launch Your First Home scheme with £110,000 income cap

Scheme details and eligibility

The UK government is set to launch Your First Home, a loan scheme aimed at first-time buyers in England. The scheme will provide government-backed equity loans covering 20% of the value of new-build properties purchased from participating developers. Buyers will need deposits as low as 2.5% to qualify.

Eligibility will be tied to household earnings, with a cap of £110,000 nationally and a higher limit of £140,000 for properties in London. These thresholds are designed to include middle-income professionals, such as teachers and nurses, who were previously at risk of exclusion under lower proposed limits of £90,000 and £110,000, respectively.

Loan terms and housing targets

The equity loans will include an initial interest-free period, though further details on repayment terms and interest rates will be announced in next week’s Budget. The scheme replaces earlier initiatives that faced criticism for inflating house prices by enabling wealthier households to borrow more without income restrictions.

The government has also acknowledged it is unlikely to meet its target of building 1.5 million homes in England by the next election. Ministers have argued that the Your First Home scheme will help stimulate housebuilding by increasing demand for new properties.

What this means

Lazyfounder analysis — our interpretation, not reported fact.

For founders and operators in the UK real estate and proptech sectors, the Your First Home scheme signals a shift in government policy toward targeted demand-side intervention. The income caps—while higher than initially proposed—create a clear addressable market: middle-income first-time buyers who struggle with deposit requirements. This could spur activity among developers and lenders already aligned with government-backed schemes, while also presenting opportunities for startups offering financial tools, such as mortgage calculators, affordability platforms, or tools to simplify the application process.

However, the scheme’s focus on new-build properties limits its immediate impact to developers and buyers in that segment, potentially sidelining secondary-market activity. The government’s admission that it will miss its housebuilding targets also suggests persistent supply-side constraints, which could keep prices elevated despite increased demand. Founders and investors in affordable housing or alternative ownership models (e.g., fractional ownership or rent-to-buy) may find this an opportune moment to explore how their solutions intersect with the scheme’s gaps.

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