First-time buyers in Cornwall could soon need just a 2.5% deposit

If you’ve been renting and watching the deposit target drift further away every year, the maths behind buying your first home could be about to look very different.

A new Government scheme will let first-time buyers purchase a new-build home with a deposit of just 2.5 per cent, and one South West housebuilder says it could be a major boost for aspiring homeowners across the region.

How the Your First Home scheme works

The £4.7 billion Your First Home scheme was detailed as part of the Government’s Autumn Budget announcements on Wednesday 28 October.

It will offer eligible first-time buyers access to a Government-backed equity loan worth 20 per cent of the purchase price. That loan is interest-free for the first five years, with interest payable from year six. The amount repayable is linked to the property’s value.

Applications are expected to open in February 2027, with the first sales anticipated from April.

What it could mean on a £300,000 home

For someone buying a £300,000 home, the deposit could be just £7,500. A conventional 95 per cent mortgage on the same property would need £15,000 up front.

The Government’s 20 per cent equity loan would then put a further £60,000 towards the purchase, which significantly reduces the size of the mortgage needed.

Who can apply

The scheme is for eligible first-time buyers purchasing qualifying new-build properties. It comes with household income limits and regional property price caps.

The Government has confirmed a household income threshold of £110,000 outside London. The maximum eligible property price will vary by location.

A boost for buyers in the South West

Cavanna Homes, which has been building homes across Devon, Cornwall and Somerset for more than a century, has welcomed the announcement. It says a smaller deposit could make a real difference to people trying to save while renting, and it believes the scheme could help thousands take their first step onto the property ladder.

Hannah Newnes, Sales and Marketing Director at Cavanna Homes, said: “This is a really significant announcement for first-time buyers, particularly here in the South West, where getting onto the property ladder can feel increasingly difficult.

“The biggest hurdle for many buyers isn’t necessarily the monthly mortgage payment, but finding the money for a deposit in the first place. Reducing that requirement to just 2.5 per cent could make homeownership a reality for people who previously thought it was years away.

“We know how much buying a first home means to people, and anything that helps make that milestone more achievable is incredibly welcome.”

More information on the scheme is available on the Cavanna Homes Your First Home page.

Hannah added: “Of course, the success of the scheme will depend on how it works in practice, but this is a positive step towards giving more people the opportunity to own a home of their own.”