A 2.5% Deposit Gets You the Keys. It Doesn’t Get You a Guarantee.
The Budget has handed first-time buyers their biggest boost in years. Under the new Your First Home scheme, you could buy a new-build home with a deposit of just 2.5%.
That’s genuinely good news. But here at Carpenter Surveyors, we’ve spent years walking through homes of every age, and we know one thing for certain: a smaller deposit doesn’t mean a smaller risk. If anything, when more of the purchase is borrowed, knowing exactly what you’re buying matters even more.
Here’s our plain-English guide to what the Budget means for buyers, homeowners and landlords, and what to do about it.
Your First Home: how it works
Your First Home is a government-backed equity loan scheme for first-time buyers in England purchasing a new-build home from a participating developer.
In short, you put down a deposit of between 2.5% and 15%, the government lends you up to 20% of the price, and a mortgage covers the rest. The equity loan is interest-free for the first five years, and there are regional price caps and income caps to check before you get excited about a particular development.
Here’s how the numbers stack up on a typical home:
Worked example
Buying a £300,000 new-build with Your First Home
Illustrative only. Price caps, income caps and lender criteria apply. Pre-registration is expected by the end of 2026, with applications from February 2027.
Why new-build doesn’t mean problem-free
It’s easy to assume a brand-new home will be perfect. In our experience, that’s rarely the case. Build quality varies widely between developers, sites and even individual plots, and issues we commonly come across include:
Poorly finished roofing and missing or badly fitted insulation in the loft. Drainage and ventilation that doesn’t meet expectations. Cracked or uneven render, brickwork and pointing. Doors, windows and fittings that aren’t properly sealed or aligned.
Most new homes come with a warranty, but warranties have limits, exclusions and time windows. Spotting a problem before you complete, or early in the first couple of years, puts you in a far stronger position to get the developer to put it right.
And remember: the equity loan is a percentage of your home’s value, not a fixed sum. Your home’s condition affects that value, so protecting it protects you.
Not sure which survey is right for a new-build? Explore our property surveys or give us a call and we’ll point you in the right direction.
What else did the Budget say about housing?
ISA changes for deposit savers. The planned cut to the tax-free Cash ISA allowance won’t go ahead, so you can still save up to £20,000 a year tax-free. For first-time buyers using a Lifetime ISA on a property above the £450,000 cap, the withdrawal charge drops from 25% to 20% from 29 October 2026. You’ll still pay a charge, but you’ll keep more of your savings.
£100 off energy bills. Households in council tax bands A to D in England will receive a £100 Household Energy Payment from January 2027. You can check your council tax band on GOV.UK.
Higher tax for landlords. From 6 April 2027, tax on property income rises by two percentage points, to 24% for basic-rate, 44% for higher-rate and 49% for additional-rate taxpayers in England, Wales and Northern Ireland.
No change to stamp duty. Many buyers hoped for a cut, but stamp duty rates stay as they are.
What could this mean for the market?
A few things are worth watching over the next year.
New-build demand should rise. With applications opening in early 2027, developers taking part in the scheme are likely to see more interest, and buyers may feel pressure to move quickly. Moving quickly is fine. Skipping due diligence isn’t.
More older homes may come up for sale. Rising landlord taxes could encourage some investors to sell up. That could mean more period terraces, Victorian semis and older buy-to-let properties on the market, many of which will have been tenanted for years. These homes can be excellent value, but they often hide issues like damp, dated wiring, roof wear and past alterations that were never signed off. A detailed survey is the best way to know what you’re taking on.
Affordability is still the big story. Government schemes help, but mortgage rates, local supply and demand, and wider economic conditions will continue to shape prices. With average two-year fixed rates sitting around 5.5% according to Rightmove, every pound matters, and that includes avoiding an unexpected repair bill in your first year.
Our advice
Whether you’re a first-time buyer eyeing a new-build, a landlord weighing up your options or a homeowner thinking about your next move, the principle is the same: know what you’re buying before you commit.
A professional survey gives you a clear picture of a property’s condition, highlights anything that needs attention and can even give you leverage to renegotiate the price.
Buying in 2027? Start with confidence.
Our RICS-regulated surveyors cover homes of every age, from brand-new builds to listed period properties. Get a clear, honest picture before you commit.