South West housebuilder hails 2.5 per cent deposit scheme as major boost for first-time buyers

A new Government scheme allowing first-time buyers to purchase a home with a deposit of just 2.5 per cent could provide a major boost to aspiring homeowners across the South West, according to regional housebuilder Cavanna Homes.

The £4.7 billion Your First Home scheme, detailed as part of the Government's Autumn Budget announcements today (Wednesday 28 October), will offer eligible first-time buyers access to a Government-backed equity loan worth 20 per cent of the purchase price, interest-free for the first five years.

For someone purchasing a £300,000 home, this could mean finding a deposit of just £7,500, compared with £15,000 for a conventional 95% mortgage. The Government's 20 per cent equity loan would contribute a further £60,000 towards the purchase, significantly reducing the size of the mortgage required.

With applications expected to open in February 2027 and the first sales anticipated from April, the scheme could help thousands of people take their first step onto the property ladder.

Cavanna Homes, which has been building homes across Devon, Cornwall and Somerset for more than a century, has welcomed the announcement, highlighting the difference a smaller deposit could make to buyers struggling to save while renting.

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.

"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."

Under the scheme, eligible first-time buyers will be able to purchase qualifying new-build properties, subject to household income limits and regional property price caps.

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

The equity loan will remain interest-free for the first five years, with interest payable from year six. The amount repayable will be linked to the property's value.

To find more information visit cavannahomes.co.uk/Your-First-Home