The Bank of England has reported that in August 2026, first-time buyer mortgage demand dropped to its lowest level since December 2023. Increased borrowing costs has seen the average five-year fixed mortgage interest rate reach 5.94%.
This is not the only challenge that has been deterring first-time buyers from getting onto the property ladder in recent years. The Help to Buy scheme ended in March 2023, removing the option for first-time buyers to purchase new build homes with a 5% deposit and an equity loan from the government to make up a further 20% (or 40% in London).
A further barrier for first-time buyers was introduced when the temporary higher thresholds for stamp duty reverted back to the lower levels on 1 April 2025.
PM Andy Burnham recently announced a new scheme intended to boost property affordability for first-time buyers in England. The “Your First Home” scheme is considered to be a replacement of the previous Help to Buy scheme and the initial details reveal that the scheme would require just a 2.5% deposit on new build properties, with the government providing a 20% loan.
For people who are looking to purchase their first property but are struggling to save up a deposit, the new scheme could help to bridge that gap.
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Burnham recently discussed the plans for the scheme: “Too many young people are struggling with the cost of housing, with many giving up hope of ever having a home to call their own.
“So, we will step in to help more first-time buyers on to the housing ladder.”
Confirmation of the scheme and more details are expected to be released in the Autumn Budget on 28 October 2026. An important factor that people will be waiting to find out is whether there is a price cap on the scheme, with speculation that there is likely to be region-based caps.
For prospective homebuyers in the south of England and particularly in London, where average house prices are higher, this will be an important detail.
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