The Number That Waited For The Budget
The silence came at the podium. Prime Minister Andy Burnham used the Labour conference on 26 September to launch the Your First Home scheme, told the hall it would be aimed at those who “really need support” — and named no earnings ceiling at all. [1] The figure that decides which families qualify was left to be filled in afterwards. That blank space is where the policy currently lives.
Here is what is actually happening. The scheme offers government-backed equity loans — public money that buys a slice of the home, repaid as a share of its value rather than a fixed balance — worth 20% of the purchase price of a new-build bought from a developer that has signed up to take part. It allows a purchase with a deposit as low as 2.5%. The loans carry an initial interest-free period. The property must be in England.
An equity loan is not a mortgage with a balance that only ever shrinks. The public money buys a share of the home, and the sum needed to repay it moves with the value of that home. If prices rise, more is owed than was lent; if they fall, less. That design ties the government’s balance sheet to the housing market rather than to the borrower’s payslip. It also means the state gains when prices climb and absorbs part of the loss when they drop.
The Times reports the expected, not confirmed, earnings limits at £110,000 for households outside London and £140,000 for those buying in the capital. Ministers had initially decided on lower limits — £90,000 outside London and £110,000 in the capital — before concluding this would deny access to too many middle-earning couples, teachers and nurses among them, so the ceiling was raised. The Budget on 28 October is due to confirm the detail. Until then, every calculation about who benefits rests on a figure that has not been signed off.
Who The Ceiling Quietly Excludes
A limit drawn at household income produces a list of the excluded, and the list can be counted. Customer data from the mortgage broker Mojo Mortgages, covering first-time buyer applications between September 2024 and September 2026, puts the share of applicants shut out by the earlier £90,000 / £110,000 caps at more than 13%. In London and Greater London the same calculation rises above 22%. The firm notes that dual-income couples in high-cost areas are hit hardest. Two ordinary salaries, added together for a joint application, clear these thresholds quickly.
John Fraser-Tucker, head of mortgages at Mojo Mortgages, frames the design as a “delicate balancing act”. [1] His first point is about the deposit: “Lowering the deposit barrier to 2.5% addresses one of the single biggest hurdles first-time buyers face — raising upfront cash while paying high private rents.” [1] His second is about the ceiling: “However, introducing strict household income caps of £90,000 nationwide and £110,000 in London creates a delicate balancing act.” He then sets out both sides of the trade. “On one hand, targeting support at lower-to-middle income households ensures government backing goes to those without access to family wealth,” he writes. “On the other, two average working earners buying together, especially in high-cost regions, can easily cross these thresholds, effectively locking out working couples who are already squeezed by high property values.” On the deposit itself he adds: “While deposit relief is welcome, restricting eligibility based on income caps risks shifting the goalposts for dual-income couples who still struggle to save a 10% deposit without the ‘Bank of Mum and Dad’”.
How buyers raise the money belongs in the same picture, because an income cap measures a salary and not a family. A Censuswide survey of 1,000 UK first-time buyers, carried out for Mojo in April, found 64% relying on side work — online reselling, freelance jobs — to build a deposit. Some 53% said the extra income cut two to three years from the wait. A further 22% stayed in a job they disliked to keep their earnings steady for a mortgage application. Mojo’s customer data show that about 26% of first-time buyers depend on a deposit gifted by family. Two households on identical incomes can therefore arrive at the scheme with very different amounts of help behind them, and the cap cannot tell them apart.
Precedent matters here, because Britain has run a version of this experiment already. Help to Buy, launched in 2013 and closed to new applicants in 2021, allowed any purchaser — not only first-time buyers — to put down 5% on a new-build worth up to £600,000. Up to 20% of the price came from a shared equity loan, interest-free for the first five years. It applied no income test at all. It drew criticism for pushing house prices higher by letting relatively wealthy households borrow more. A second version, running from 2021 to 2023, restricted access to first-time buyers and applied regional price caps to the properties that could be bought under it. The current design keeps the first-time-buyer restriction and adds a test the earlier schemes never carried: what the household earns.
Supply, Developers And The Unnamed Cuts
The scheme is also being sold as construction policy, and the reason is a missed target. Ministers have conceded they will fall short of the pledge to build 1.5 million homes in England by the next election. The loans apply only to new-build properties bought from participating developers.
The bill is the unresolved part. The scheme is to be funded from within existing government budgets, but no detail has been given on which other areas of spending will be cut to make room. Developers taking part will be asked to contribute towards running costs.
Anyone weighing the scheme against what already exists has several routes to compare, and the differences are numerical. The Lifetime ISA — an individual savings account for under-40s with a government top-up — lets a buyer under 40 save up to £4,000 a year with a 25% bonus capped at £1,000, usable only on homes up to £450,000; a withdrawal that does not qualify costs about 6.25% of the original savings. A consultation launched in June proposes replacing it with a First Time Buyer ISA, expected in April 2028. First Homes sells new-builds at 30% to 50% below market value, but availability is thin and the discount passes to the next buyer on resale.
Shared ownership — buying a part-share of a home and renting the rest — lets a buyer purchase a 10% to 75% stake and pay rent on the remainder. A 25% share of a £250,000 home costs £62,500, and a 5% deposit on that share comes to £3,125 — but the buyer still pays 100% of the service charges, the recurring fee leaseholders pay for upkeep of the building and shared areas. The Mortgage Guarantee Scheme, made permanent in July 2025 under the name Freedom to Buy, supports mortgages covering 95% of the price on open-market homes, meaning a 5% deposit rather than the scheme’s 2.5%. Those loans carry higher interest rates and tougher affordability checks — a lender’s test of whether repayments fit a borrower’s income — and many lenders already offer 95% mortgages without the guarantee, which limits what the guarantee adds. Run a full £250,000 purchase through the new scheme and the arithmetic is different: a 2.5% deposit is £6,250, and the equity loan covers £50,000 of the price.
What remains open is not whether the ceiling will be set, but what a ceiling can do. A cap tight enough to keep the subsidy away from households that do not need it may also exclude the teachers and nurses the scheme was adjusted to include — and a cap loose enough to reach them may simply be absorbed into the price of a new-build. On 28 October, the Budget will have to show both the threshold and the line that pays for it.