27th September 2026
A new government-backed scheme is being proposed to help first-time buyers in England overcome one of the biggest obstacles to getting onto the housing ladder: finding a deposit.
Prime Minister Andy Burnham announced the new Your First Home scheme on 26 September, with further details due to be confirmed by the Chancellor at next month's Budget.
The proposal is aimed particularly at people who cannot rely on what has become known as the "bank of mum and dad" to provide a substantial deposit.
Under the scheme, eligible first-time buyers would potentially be able to purchase a new-build home with a deposit of just 2.5%, alongside a 20% government-backed equity loan.
The government says the equity loan would initially be interest-free. The intention is that this could reduce the amount a buyer needs to borrow through a conventional mortgage and therefore reduce monthly mortgage costs compared with taking out a 95% mortgage.
There will, however, be conditions.
The scheme will apply to new-build properties, and the developer will have to sign up to the scheme. Developers will also be expected to make a contribution towards its costs.
There will be a household income limit and local property price caps, although those figures have not yet been announced. The government says the detailed rules, costs and implementation timetable will be set out at the Budget.
The scheme is therefore not quite the same as simply giving first-time buyers a government loan.
It is an equity loan. The government takes an equity interest in the property, meaning that the assistance is linked to the value of the home rather than being an ordinary loan with a fixed repayment schedule.
The government says the scheme is also intended to stimulate the new-build housing market at a time when higher construction costs and wider economic pressures are creating difficulties for housebuilders.
But Scotland has its own scheme
For people in Scotland, the important point is that the new English scheme does not apply.
Scotland already has its own First Homes Fund, which opened in June 2026.
The Scottish scheme provides first-time buyers with up to £10,000 towards the purchase of a home worth up to £300,000.
Unlike the proposed English scheme, the Scottish fund can be used to buy either an existing property or a new-build home. The Scottish Government takes a percentage equity stake in the property in return for its contribution. There are no monthly interest payments on that equity stake.
A buyer normally still needs a deposit of around 5%, subject to the requirements of their mortgage lender, and must have a capital-repayment mortgage covering at least 25% of the purchase price or valuation, whichever is lower.
The Scottish Government has allocated £500 million to the First Homes Fund and expects around 50,000 households to benefit over the course of the current Parliament. The first phase was intended to support around 2,000 households during its first 100 days.
There is also no restriction on where in Scotland the property is located, provided it meets the scheme's rules and the value does not exceed £300,000.
That could make the Scottish scheme particularly relevant to areas such as Caithness.
What could it mean for Caithness?
The housing problem in Caithness is rather different from that in many parts of England.
The difficulty for a young person trying to buy a home in Wick or Thurso may not simply be the absolute price of the house.
There is also the question of income and mortgage affordability.
A relatively modest house may look inexpensive compared with property in Edinburgh, London or parts of southern England, but a young person still has to demonstrate to a mortgage lender that they can afford the repayments.
And saving even a 5% deposit can be difficult when rent, energy bills, food and transport costs are taking a substantial part of a household's income.
The Scottish First Homes Fund therefore potentially has a particular relevance in areas where property prices are lower but wages may also be lower.
For example, a £200,000 home would require £10,000 for a 5% deposit, before taking account of the other costs associated with buying a property.
The Scottish Government's contribution can therefore make a meaningful difference to the amount a first-time buyer has to find.
But there is another issue which is perhaps more important in Caithness.
Is there enough suitable housing being built in the first place?
A scheme which helps people obtain mortgages does not automatically solve a shortage of suitable homes.
In fact, there is a potential tension whenever governments make it easier for people to borrow more money to buy houses.
If the number of homes available does not increase sufficiently, additional purchasing power can potentially feed into house prices.
That is one reason why the English scheme is being restricted to new-build properties. The government says it wants the policy to support first-time buyers while also stimulating housebuilding.
The Scottish scheme takes a different approach by allowing the money to be used for existing homes as well as new builds.
The "bank of mum and dad" problem
There is a wider social issue behind both schemes.
People whose parents can provide £20,000, £30,000 or more towards a deposit have an enormous advantage over someone whose parents simply do not have the money.
That can turn home ownership into something increasingly dependent on family wealth rather than simply income.
The new English scheme has been explicitly presented as an attempt to help people who cannot call on parental financial support.
Scotland's scheme is addressing a similar problem through a different mechanism.
This is particularly relevant to rural areas.
A young person who grows up in Caithness may have a reasonable chance of finding a house at a price that would be completely unrealistic in Edinburgh or London.
But if their parents have limited assets and their own wages are relatively modest, raising the deposit can still be the barrier that prevents them buying.
government support push prices higher?
There is another side to the argument which is worth remembering.
Helping people buy homes is clearly useful to those who would otherwise be unable to do so. But economists have long debated whether demand-side assistance can push up house prices if housing supply does not respond.
In simple terms, giving buyers more money does not create another house.
That is why the supply of new homes matters.
The English government is explicitly linking its new scheme to the new-build market and expects developers to contribute to the cost.
Scotland's approach is somewhat broader, combining the First Homes Fund with a wider programme of affordable housing investment.
For Caithness, the question therefore goes beyond whether a young person can obtain assistance with a deposit.
It is whether there are enough homes, at prices that local wages can support, in the places where people actually want and need to live.
A different housing problem in the far north
There is also an interesting contrast in Caithness.
The area does not have the same house-price pressures as Britain's most expensive cities, but it has its own housing problems.
Some communities have relatively limited new housebuilding, while tourism and second-home demand can affect the availability of properties. At the same time, employers can struggle to attract workers if suitable housing is unavailable.
That means a first-time buyer scheme could form only one part of the answer.
If Caithness wants to retain more young people, it needs a combination of jobs, wages, housing, education and transport.
Helping someone raise a deposit may solve one problem while leaving the others untouched.
The new English announcement therefore provides an interesting opportunity to look at the Scottish position.
Scotland does not need to copy England because it already has its own First Homes Fund.
But the comparison raises a useful question for Caithness:
Are existing Scottish housing schemes reaching the young people who need them most, particularly in rural areas?
For someone trying to establish an independent life in Caithness, the difference between having to find a £10,000 deposit alone and receiving £10,000 of government-backed assistance could be considerable.
The bigger challenge, however, is making sure that when that young person finally has the means to buy, there is a suitable home available for them to buy in the first place.
That may ultimately be just as important as the deposit.