• New 2.5% deposit ‘Your First Home’ scheme and flexible FTB ISAs
• Buyers must still navigate complex equity loan terms and tight new-build contract deadlines
• KWW ensures your transaction is handled smoothly from start to finish

Getting a foot on the property ladder has felt, for many young professionals and families across Surrey and Greater London, like trying to hit a moving target. High interest rates, strict lending requirements, and the sheer scale of the deposit needed have kept many would-be homeowners locked into the rental cycle for longer than planned.

This week’s Autumn Budget brought a welcome shift in policy focus. With a headline focus on helping first-time buyers overcome the initial deposit hurdle, Chancellor John Healey unveiled targeted measures designed to kickstart homeownership.

Here is our practical guide to what was announced, how the new schemes work, and what you need to consider before taking your first steps toward buying a home.

1. The ‘Your First Home’ Scheme: A 2.5% deposit

The flagship policy for prospective homeowners is the Government’s new ‘Your First Home’ initiative, backed by £4.7 billion in funding to support an estimated 70,000 households.

Buyers can purchase qualifying new-build homes with just a 2.5% deposit. On a property priced at £350,000, this reduces the required upfront savings from £17,500 (under a standard 5% deposit) down to £8,750.

The Government provides an interest-free equity loan of up to 20% of the property’s value for the first five years. The remaining 77.5% is covered by a standard main-residence mortgage from participating lenders.

To ensure the scheme directly assists genuine first-time buyers rather than higher-rate investors, strict income thresholds apply: For London, household income is capped at £140,000; for the rest of the UK, the figure is £110,000.

2. Reforms to first-time buyer savings: The FTB ISA

Alongside direct property assistance, the Government announced the introduction of the First Time Buyer ISA (FTB ISA), replacing the existing Lifetime ISA (LISA) framework.

Under previous rules, buyers using a LISA faced steep 25% withdrawal penalties if purchasing a property above specified price limits or using funds for non-qualifying reasons.

The new FTB ISA removes these withdrawal penalties when purchasing qualifying residential properties, giving savers greater flexibility and peace of mind while building their deposit.

3. Stamp Duty Land Tax (SDLT): Where things stand

For first-time buyers, SDLT relief remains in place. First-time buyers pay zero SDLT on property purchases up to £300,000, with a discounted rate applying on the portion up to £500,000.

For buy-to-let investors and second-home owners, however, property income surcharges will increase to 4% by 2027. This shift is likely to encourage existing landlords to rationalise their portfolios, potentially releasing smaller starter homes back onto the open market for first-time buyers.

Key considerations for buyers

While lower deposit requirements make entering the market significantly easier, purchasing a property, particularly under a government-backed equity loan scheme, requires careful legal and financial planning.

New-build contracts and developer deadlines: Buying a new-build property under government schemes involves tight exchange deadlines (often 28 days from reservation) and detailed contract review regarding warranties (NHBC or equivalent), service charges, and completion dates.

Understanding equity loan terms: Remember that an equity loan is a percentage of your home’s value, not a fixed sum. If your property increases in value over time, the repayment amount increases proportionally. Understanding the redemption options and interest rates after Year 5 is vital.

Gifted deposits and mortgage approvals: If family members are assisting with your 2.5% deposit, your conveyancer must verify gifted funds early to satisfy lender anti-money laundering requirements and avoid delays.

How KWW Solicitors can help

At KWW Solicitors here in East Molesey, our experienced conveyancing team has guided generations of local buyers through the process of securing their first home. We combine approachable, personal legal service with modern case management technology to keep your move running smoothly from offer to completion.

Whether you are exploring a new-build under the ‘Your First Home’ scheme, buying through a standard mortgage, or seeking clarity on contract terms and searches, our team is here to protect your interests every step of the way.

Get in touch with our conveyancing team today for a quote or an informal chat about your upcoming purchase.

IMPORTANT: This article is for information only and should not be seen as formal legal advice. Contact us to discuss your individual situation