Your First Home: Will Budget move get Londoners on the ladder?
asserted
move → get → ladder
London’s property market has been marked by a distinct lack of optimism in the past few years.
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market → mark → years
For no-one has this been more true than aspiring first-time buyers without family money to help them onto the ladder, and for the capital’s housebuilders facing down the triple threat of decreased demand from said buyers, increased construction costs and a raft of new legislation.
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this → aspire → legislation
So can Your First Home, announced in the Budget today and promising first-time buyers with a 2.5 per cent deposit and backed by a 20 per cent government loan on a new-build property, reinvigorate the capital’s stalled market and help ease the ongoing housing crisis?
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Home → announce → crisis
The announcement has certainly given a ray of hope to the capital’s young private renters, many of them on decent salaries (necessary to pay London rent) but struggling to save for a deposit (that rent again).
“The option for a 2.5 per cent deposit is really quite exciting because saving is definitely the biggest hurdle,” says Rosie, 29, a conference organiser who currently rents a one-bedroom flat in Clapham with her boyfriend costing more than £1,000 per month each plus bills.
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who → give → month
This equates to between 35 and 40 per cent of her take-home salary.
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This → equate → salary
“I look at properties for sale frequently but I find it quite disheartening when I think I’m looking within a realistic budget and then work out the deposit we would need to save to afford it.
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we → look → it
A lot of my friends have also given up thinking about it, and others have moved really far out of London and are commuting from places like Birmingham.
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others → give → Birmingham
That includes people like Abigail, 29, a native Londoner who recently moved to Manchester with her partner.
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who → include → partner
They are currently paying the equivalent rent for a two-bedroom flat in the city centre as they were paying for one room in a house share in London.
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they → pay → London
But, while Abigail’s partner is from Manchester originally, both of them would prefer to settle in London.
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both → prefer → London
“I’m from London and it is where my friends and family and support network is, as well as the most exciting job opportunities,” she says.
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she → ’m → London
“But I’ve moved every year or two with renting and we’d like to start a family and put down roots in a community, so our goal is to buy somewhere in the near future.
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goal → move → future
That has felt impossible in London.
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That → feel → London
“We’re both on decent salaries but neither of us have family help.
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neither → ’re → help
We try to save what we can but I pay about 36 per cent of my salary on rent alone.
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I → try → rent
From that perspective, Your First Home looks quite exciting.”
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Home → look → perspective
Almost two thirds of aspiring buyers in London are hopeful that the scheme would help them on the ladder sooner, according to research from Fairview New Homes.
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scheme → aspire → Homes
However, separate data from mortgage broker Tembo has warned that the scheme threatens to lock out those with lower household incomes, who cannot borrow enough to cover the remaining 77.5 per cent of the purchase price.
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who → warn → price
The broker found that lower earners would need a mortgage 9.9 times their income in the capital, potentially possible for a couple, but out of reach for many single buyers.
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earners → find → buyers
“The mortgage is definitely the bigger sticking point for me as a single person,” says Kyle, 32, who works in PR and shares a flat near Oval with a friend, paying just under £1,000 per month in rent plus bills.
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who → say → rent
“Like a lot of people my age, I’m living paycheck to paycheck, month to month.
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I → live → month
I’m lucky enough to have some money saved from relatives, but even with that I would struggle to get a mortgage alone.
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I → ’m → mortgage
The majority of my friends who have bought have done it with two incomes, so it does feel stacked against single people.
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it → buy → people
“At some point I would have to consider moving out of London to somewhere more affordable but I moved to London for a reason, I’ve built a life here, if it’s going to be possible I would 100 per cent like to stay.
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I → consider → life
I’m optimistic, and hearing about Your First Home has been encouraging.”
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hearing → ’m → Home
Under the scheme first-time buyers with a 2.5 per cent deposit can access a 20 per cent government-backed equity loan, interest-free for five years, to buy a new-build property from a registered developer.
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buyers → access → developer
The purchase price will be capped at £650,000 in inner London and £500,000 in outer London and the household income of potential buyers cannot exceed £140,000 in the capital.
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income → cap → capital
Pre-registration will open in December this year with full applications allowed from February 2027 and first loans issued that April.
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registration → open → February
Read More
Announcing the scheme as part of his autumn Budget, Chancellor John Healey said: “Two in five young people are trapped paying more than a third of their income on rent while they watch their hopes of buying their own home slip away.
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hopes → read → home
For every young person who's working hard, saving what they can and dreaming of their first home, I'm taking action.”
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I → work → action
The Government also hopes that by boosting buyer demand it can boost the housing market and encourage developers to build more housing.
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it → hop → housing
Only 6,325 new private sector homes were started in London between mid-2025 and a year later, just seven per cent of the Mayor’s overall annual target.
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homes → start → target
Meanwhile just 600 new homes were sold to individual buyers in London in the first quarter of this year, according to Molior London data.
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homes → sell → data
First-time buyers have had little help since Help to Buy closed in October 2022.
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Help → have → October
Under that scheme London buyers with a five per cent deposit could get a government equity loan of 40 per cent on a new home costing up to £600,000.
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buyers → get → 600,000
The capital’s leading developers have welcomed the new scheme as a step in the right direction.
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developers → lead → direction
People want to get out of renting and even with a 20 per cent loan this is going to help,” says Joe Antoniazzi of London Square.
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Antoniazzi → want → Square
“But the 40 per cent loan that was on offer in London last time really helped affordability and made the mortgage payment and service charge much more competitive compared to rent.”
Many have expressed reservations about the efficacy of the scheme in isolation.
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Many → help → isolation
The price caps will put only around a third of homes for sale in the capital within reach of buyers, according to estimates from property consultancy Montagu Evans.
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caps → put → Evans
…and 15 more, not listed.
The Aporia
