In his Autumn Budget, the Chancellor announced details of the new scheme to help first-time buyers purchase new-build homes, along with changes affecting households and businesses. Here’s what you need to know…

In today’s Budget, Chancellor John Healey has confirmed details of Your First Home, a new scheme to help first-time buyers purchase new-build homes in England. The Budget also announced measures affecting household energy bills, savings, work and business rates.

Help for first-time buyers

Your First Home will offer eligible first-time buyers an equity loan of 20% towards the cost of a new-build home from a participating developer. Buyers will need to put down a deposit of between 2.5% and 15%.

The loan will be interest-free for the first five years, with charges increasing gradually after that. The Government says the interest-free period could reduce monthly costs by hundreds of pounds compared with a 95% mortgage.

Eligibility will depend on household income and local property price caps. The income limit will be £110,000 outside London and £140,000 in London. The property price caps will be £650,000 in inner London and £500,000 in outer London. Elsewhere, caps will be based on local median prices.

MB Associates’ Sales & Operations Director, Les Pick, says: ‘We cautiously welcome the measures announced in the Autumn Budget, particularly the introduction of the Your First Home scheme, which could provide a much-needed boost to first-time buyers and the new-build housing market. However, we should point out that first-time buyers do not necessarily need a large deposit and that there are already quite a few solutions for those with as little as £5000 – subject to terms and conditions.'

Les adds: ‘The proposed 20% equity loan and smaller deposit requirements could make homeownership more accessible to buyers who have struggled with affordability and saving for a deposit. However, as with any government-backed housing initiative, the devil will be in the detail.

Longer-term implications of loans

It’s important to understand the terms of these loans. Les says: ‘While the initial five-year interest-free period is attractive, buyers must fully understand the longer-term implications of equity loans, including future charges, repayment obligations and the potential impact of changes in property values. It will also be important to understand how mortgage lenders assess affordability and how widely the scheme will be supported.’

The government says participating developers will contribute to the scheme’s costs. Contributions will be set on a sliding scale to help protect smaller developments. Funding will be capped each year, and the government says it will monitor demand with developers and lenders.

The scheme is intended to help more first-time buyers onto the housing ladder while supporting demand for new homes. It is expected to launch next spring.

Support with energy bills

While announcing the other measures in his Autumn Budget, the Chancellor said he recognised the financial pressures households and businesses face from rising energy costs. He said: ‘I know that people are under pressure, and households and businesses face pressures from rising energy costs due to the conflict in the Middle East. My choice is to give families and businesses some breathing space.’

The Budget included plans for interest-free or low-interest loans to help households pay for solar panels, battery storage and heat pumps. The Chancellor also announced a new ‘Energy Wealth Fund’ to bring UK energy costs down in line with the rest of Europe.

The government has already removed VAT from electricity bills for 29 million households. The cut will now be extended through winter and spring to July 2027.

The Chancellor also said gas standing charges, the daily costs households pay to access their gas supply, will be scrapped.

Around 20 million households in council tax bands A to D will receive a £100 ‘Household Energy Payment ‘to help with bills through to spring.

‘The wider measures aimed at reducing household costs are encouraging and may help improve consumer confidence, which remains crucial to the housing market,’ says Les.

Other household measures

The government will suspend tariffs on more than 100 supermarket products to help keep food prices down.

Previous tax cuts for motorists will be extended through the winter to next July. People who use their own car or van for work will also benefit from changes to mileage rates. The rate will stay at 55p per mile for the first 10,000 miles and rise from 25p to 35p for each mile above that.

Fuel duty has been frozen again, with the temporary 5p cut extended to July 2027.

Future help for carers

The Chancellor also announced changes for unpaid carers. Currently, carers who earn slightly more than the Carer’s Allowance limit lose the entire benefit. The Government plans to remove this ‘cliff edge’ from the 2030/31 financial year.

Self-employed fathers and partners will be eligible for paid parental leave for the first time. They will be entitled to two weeks’ support worth £194 per week. At present, statutory paternity pay is available only to eligible employed fathers and partners.

Cash ISA limit not reduced

The Chancellor has also scrapped plans to reduce the annual cash ISA limit for people under 65. Former Chancellor Rachel Reeves had said the limit would fall from £20,000 to £12,000 from next April. This cut will no longer go ahead, leaving the annual limit at £20,000.

There will be no change to tax rates on dividend income or employment income.

The full new State Pension is set to rise by 3.9% from April 2027 to £13,036.40 a year. This would take it above the frozen £12,570 Personal Allowance for the first time.

The National Minimum Wage and National Living Wage will both rise by 3.9%. The rate for people aged 21 and over will increase to £13.21 an hour, while the rate for 18 to 20-year-olds will rise to £11.27.

Changes for businesses

Small business rate relief will be extended to businesses to £18,000, up from £12,000.

Business rates for retail, hospitality and leisure businesses will be frozen for two years to prevent above-inflation increases. Adult gaming centres and vape shops will not qualify for business rate relief. The business rates transitional relief supplement will also be extended for a further two years.

Turning back to the first-time buyer scheme, it’s important to seek advice from an experienced broker to ensure you fully understand its implications. Les says: ‘At MB Associates, we believe that access to good independent mortgage advice will be essential in helping first-time buyers understand whether this scheme genuinely represents the right long-term financial decision.’