First-time buyers in Chichester and across West Sussex will see the full details of a new 2.5% deposit scheme confirmed next month, following a government announcement intended to lower the entry barriers for the property market.
The “Your First Home” programme, first announced on 26 September 2026, is a new equity loan scheme led by Prime Minister Andy Burnham and Chancellor John Healey. It is designed to replace and evolve previous support measures, specifically targeting those who struggle to save the standard 5% or 10% deposits required by most commercial lenders.
While the broad strokes of the scheme have been outlined, the formal confirmation and comprehensive technical details are scheduled for the Autumn Budget on 28 October 2026.
How the ‘Your First Home’ scheme works
The scheme is restricted to first-time buyers purchasing new-build properties in England. Under the proposed terms, a buyer would only need to provide a 2.5% cash deposit from their own savings. The government then provides a 20% equity loan, which remains interest-free for an initial period—expected to be the first five years of ownership.
The remaining 77.5% of the property value is covered by a traditional mortgage from a participating bank or building society. This structure significantly reduces the monthly mortgage payments during the interest-free period and allows buyers to secure a home with a much smaller upfront sum.
Funding for the initiative is being drawn from a reprioritisation of existing government budgets. Additionally, housebuilders and developers will be required to pay a participation fee to be part of the scheme, ensuring the private sector contributes to the cost of the loans.
What it means for West Sussex buyers
The scheme is expected to be particularly relevant in areas like Chichester and the wider West Sussex region, where high property prices often outpace the ability of local residents to save for a deposit. According to The Guardian, the government is looking to stimulate the new-build market while providing a direct route into homeownership for those currently stuck in the rental cycle.
However, several key details remain under wraps until the Budget on 28 October. These include:
- Property Price Caps: While reports suggest a maximum price cap of £600,000 may be applied nationally, it is not yet clear if West Sussex will have a specific regional cap similar to previous Help to Buy iterations.
- Income Thresholds: The government is expected to set maximum household income limits to ensure the scheme is targeted at those who genuinely need it.
- Participating Sites: Only new-build developments from developers who have paid the participation fee will be eligible.
Next steps and deadlines
For those looking to move soon, the scheme will not be open for immediate applications. Following the Budget confirmation in late October, pre-registration for “Your First Home” is expected to open by the end of 2026.
Prospective buyers are advised to monitor the official price and income caps once they are released to determine if specific developments in the Chichester area fall within the eligibility criteria. The scheme is intended to work alongside existing financial products, though the government has yet to confirm how it will interact with Help to Buy ISAs or Lifetime ISAs (LISAs).
