Earnings limit of up to £140K for first-time buyers loan scheme

Published23 October 2026

Households will need to earn less than £110,000 to qualify for the government's new loan scheme for first-time buyers, or £140,000 for homes bought in London.

As first reported by The Times, external, the earnings limits are expected to be confirmed at the Budget next week.

The Your First Home scheme will offer government-backed equity loans worth 20% of new-build properties in England bought from participating developers.

The loans, which will also be subject to an initial interest-free period, are designed to help people buy a home with deposits as low as 2.5%.

Previous schemes to help first-time buyers did not restrict eligibility by income but faced criticism for stoking house prices by allowing relatively wealthy households to borrow more.

Unveiling the Your First Home Scheme at last month's Labour conference, Prime Minister Andy Burnham said it would focus on those who "really need support".

The Times reported that ministers had initially decided to set the earnings limits at £90,000 for homes outside outside London and £110,000 in the capital, before concluding this would deny access to too many middle-earning couples, such as teachers and nurses.

The government has also argued that the scheme will help to boost housebuilding, after ministers conceded they are set to miss a target to build 1.5 million homes in England by the next election.

Help to Buy

Labour has said the scheme will be funded by within existing government budgets, but is yet to provide details of which other areas will see their spending cut.

Developers taking part in the scheme will also be asked to contribute towards running costs.

The Home Builders Federation, which represents developers, has welcomed the plans and urged the government to move quickly to set up the scheme.

The Conservatives have however branded the proposals a "colossal admission of failure" of Labour's housebuilding record, and expressed concerns that the new developer levy could push up the price of new homes.

Like the Help to Buy scheme launched under the Conservative-Liberal Democrat coalition government, the scheme will use equity loans, which are linked to changes in the value of properties they are used to purchase.

That scheme, which initially ran between 2013 and 2021, enabled all home purchasers to put down a 5% deposit on a newly built home worth up to £600,000.

Up to 20% of the cost of the home was funded by a shared equity loan, which was interest-free for the first five years.

A second version of that scheme, which ran from 2021 to 2023, restricted access to first-time buyers and applied regional-level price caps to the properties could be bought under the programme.

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