A 2.5% deposit on a new-build flat in Kingston upon Thames. That is the headline figure from Chancellor John Healey's Autumn Budget announcement on 28 October 2026, and it has understandably caused a stir among first-time buyers in Surbiton, New Malden and across outer south west London. But the scheme will not open for applications until February 2027 at the earliest, and several important details are still missing. This article sets out what is confirmed, what remains unknown, and why an independent RICS valuation and snagging inspection should sit alongside any decision to use the Your First Home scheme London.
The Your First Home scheme London rules matter because outer London boroughs such as Kingston face different price caps and income limits than inner London or the rest of England. Buyers need to separate the confirmed Treasury framework from speculation before making any purchase decision.
Key Takeaways
- Your First Home is a government equity loan of up to 20% of a new-build purchase price, letting buyers put down a 2.5% deposit, interest-free for five years.
- Applications are expected to open February 2027, with a spring 2027 launch; full local price caps have not yet been published.
- Household income is capped at £140,000 in London; outer London boroughs like Kingston fall under the £500,000 outer London price cap, though the exact local figure will follow the local-authority median once released.
- Developers must opt in, so availability will vary across south west London new-build sites.
- Lessons from Help to Buy suggest buyers should get an independent RICS valuation and a snagging inspection before relying on the scheme's figures.
How the Your First Home Scheme Is Meant to Work
The mechanics mirror the old Help to Buy equity loan, with some changes. A first-time buyer purchases a new-build home from a participating developer in England, puts down a deposit of as little as 2.5% of the purchase price, and the government lends up to 20% of the value as an equity loan. A mortgage covers the rest.
The equity loan is interest-free for five years. What happens after that has not yet been confirmed by government. Under Help to Buy, a fee of 1.75% applied from year six onward, rising annually thereafter, so buyers should expect something similar under Your First Home, but the final terms have not been published and should be checked once available.
The loan is not a fixed sum of money, it is a percentage share of the property's value. If the home rises in value, the amount owed to the government rises too. If it falls, the government's share falls with it. This detail caught some Help to Buy borrowers off guard in the mid-2010s, when they discovered that repaying "20% of the loan" actually meant repaying 20% of a higher current valuation.
£4.7 billion of Treasury funding has been committed over five years. The Office for Budget Responsibility expects only a marginal effect on overall housing supply, since the scheme supports demand rather than directly funding new construction.
Who Qualifies: Income and Price Caps
The government has set a household income cap of £140,000 for London applicants, against £110,000 elsewhere in England. Help to Buy had no income cap at all, so the new income limits are a notable change, reflecting an attempt to target the scheme more tightly than its predecessor.
Price caps are based on local-authority median house prices, with two regional ceilings announced so far:
| Area | Price Cap (announced) | Notes |
|---|---|---|
| Inner London boroughs | £650,000 | Upper ceiling, not every borough's actual cap |
| Outer London boroughs (including Kingston) | £500,000 | Upper ceiling, not every borough's actual cap |
| Rest of England | Lower, varies by region | Based on local median prices |
Kingston upon Thames is an outer London borough, so it sits under the £500,000 ceiling. That figure is a maximum, not a confirmed local cap. The actual Kingston cap will be set against the borough's own median new-build price once the Treasury publishes borough-level figures. Buyers in Surbiton and New Malden should treat £500,000 as the outer limit of what might apply locally, not as a guaranteed allowance.
The Home Builders Federation has welcomed the scheme in principle. Chief executive Neil Jefferson said the industry body supports the Your First Home scheme as a measure to help first-time buyers of new-build homes, while noting that full parameters are still awaited.
Will Developers in South West London Opt In
Participation is voluntary. Developers must choose to join the scheme for each qualifying site, as they did under Help to Buy. Not every new-build scheme in Kingston, Surbiton or New Malden will necessarily offer it, particularly smaller sites or those already selling well without incentives.
Zoopla's Richard Donnell has estimated the scheme could support up to 30,000 first-time buyers a year nationally, roughly half the scale of Help to Buy at its peak, at an estimated cost of about £1.5 billion annually. That scale suggests demand may outstrip availability in popular commuter areas close to central London, including much of south west London.
Lessons From Help to Buy Worth Remembering
Help to Buy ran from 2013 to 2023 and left several patterns worth noting before anyone commits to its successor.
New-build premium. Independent research repeatedly found that new-build homes under Help to Buy often sold at a premium compared with similar second-hand properties nearby. An equity loan scheme that only applies to new-build stock can create pressure for buyers to accept a higher starting price than they might pay for an equivalent existing home.
Repayment tied to future value, not the original loan amount. As noted above, the loan tracks a percentage of the property's value at the time of repayment or sale, not a fixed cash sum. A buyer repaying the loan after a period of strong price growth owes considerably more in cash terms than they originally borrowed.
Leasehold and service charge checks. Many new-build flats, particularly in London, are sold leasehold with ongoing service charges and ground rent. These costs sit outside the equity loan calculation entirely and can rise over the years. Reviewing the lease terms, service charge accounts and any sinking fund arrangements before exchange is a sensible step regardless of which purchase scheme is used.
Snagging and build quality. New-build homes are not immune to construction defects. A professional snagging inspection, ideally before legal completion or shortly after, identifies issues such as poor finishing, incomplete fittings or structural concerns while the developer still has an obligation to remedy them under warranty.
Independent valuation. A mortgage lender's valuation is carried out to protect the lender's interest, not the buyer's. A separate RICS valuation or Home Survey gives a buyer their own, independent view of whether the asking price reflects the property's true condition and local market value, particularly important when Zoopla's October 2026 House Price Index shows London prices down 1% annually, a fall of roughly £5,400, with flats down 2% nationally and London homes taking an average of 56 days to find a buyer. In a softer market, a new-build premium matters even more.
Other Changes Announced Alongside Your First Home
Two related measures were confirmed in the same Budget:
- The Lifetime ISA withdrawal charge drops from 25% to 20% from 29 October 2026, for home purchases above the existing £450,000 property price cap.
- A new First Time Buyer ISA will launch in April 2029, offering a 25% government bonus on savings up to £4,000 a year, with no upper age limit and no withdrawal charges.
These sit alongside, rather than replace, the equity loan scheme, giving buyers more than one route to build a deposit.
Frequently Asked Questions
When can I apply for the Your First Home scheme London?
Applications are expected to open in February 2027, with the scheme launching in spring 2027. Full eligibility details and local price caps have not yet been published.
Does Kingston upon Thames fall under the inner or outer London price cap?
Kingston is an outer London borough, so it falls under the £500,000 outer London ceiling. The confirmed local cap will be based on Kingston's own median new-build price once published.
Can I use Your First Home on an existing (resale) property?
No. The scheme applies only to new-build homes bought from a developer that has opted into the scheme.
Is the equity loan interest-free forever?
No. It is interest-free for the first five years. What applies after that has not yet been confirmed, though Help to Buy charged a 1.75% fee from year six onward, so buyers should expect something comparable and check the final terms once published.
Should I still get a survey if I buy through this scheme?
Yes. An independent RICS valuation and a snagging inspection are separate from the mortgage lender's valuation and give a buyer their own assessment of price and build quality.
What is the household income cap for London applicants?
£140,000, compared with £110,000 for the rest of England. Help to Buy had no income cap at all, so this is a new restriction for applicants.
Conclusion
The Your First Home scheme London framework gives genuine reason for cautious interest among buyers in Kingston, Surbiton and New Malden, but the detail that matters most locally, the actual Kingston price cap, is not yet public. Treat the £500,000 outer London figure as a ceiling, not a promise. Before applications open in February 2027, prospective buyers should start gathering mortgage advice, check which local developers might opt in, and budget for an independent RICS valuation and a snagging inspection on any new-build purchase, whichever scheme eventually funds the deposit.
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Your First Home Equity Loan Estimator
Indicative only, based on announced scheme parameters (October 2026). Not financial advice. Local Kingston price caps are not yet confirmed.
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