The Government’s forthcoming Your First Home scheme will not eliminate the reliance of first-time buyers on financial support from family members, according to analysis by mortgage advisers.
Further details of the Your First Home scheme are expected in the Budget later this month. The initiative will provide a Government-backed equity loan for first-time buyers purchasing new-build properties, requiring only a 2% deposit.
Family contributions dominate deposits
Data from Heron Financial, covering 12 months to 4th October 2026, shows that 34% of its first-time buyer clients used gifted deposits or inheritance. This aligns with the Government’s English Housing Survey 2024-25, which found 31% of recent first-time buyers received help from family or friends.
Where family money was involved, it made up a median 59% of the deposit, according to Heron Financial. In 57% of cases, family cash covered more than half the deposit, while in 23% of instances, family members funded almost the entire deposit.
The analysis found that without family support, 71% of buyers would still have had at least a 2.5% deposit of their own, the minimum required under the Your First Home scheme. Some 62% would have had at least 5%, while 28% would have had 10% or more. Overall, just one in 10 first-time buyers in Heron’s data would have been left without a 2.5% deposit if family help had been removed.
Scheme limitations highlighted
Matt Coulson, founder at Heron Financial, said the scheme targets the barrier that the Bank of Mum and Dad exists to solve. “By dropping the deposit to 2.5%, it targets the barrier the Bank of Mum and Dad exists to solve, and on these numbers most would-be buyers could clear that bar on their own,” he said.
However, he noted two significant limitations. “It only applies to new-build from signed-up developers, so it’s far narrower than a gift that works on any property. And the deposit was only ever half the problem: a smaller deposit means a bigger mortgage, so at today’s rates the monthly payment still decides whether people can afford it.”
James Blackler, Managing Director at Oakstead Finance, said the scheme will only “help at the margins”. He noted that affordability concerns remain a significant barrier beyond deposit requirements.
“A 59% median contribution from family money isn’t a top-up, it’s effectively the deposit, and that’s before you even get to the 23% of cases where family covered almost the whole thing,” Blackler said. “A lower deposit threshold doesn’t fix stretched affordability once rates and living costs are factored in.”
Market implications
The findings suggest that while the Your First Home scheme may assist buyers with sufficient income but limited savings, it is unlikely to fundamentally alter the dynamics of the first-time buyer market. The restriction to new-build properties from participating developers limits its scope compared to family gifts, which can be applied to any property purchase.
With market conditions varying significantly across regions, the scheme’s impact may differ depending on local property prices and availability of eligible new-build stock. Industry observers suggest that addressing monthly affordability alongside deposit requirements would be necessary to substantially reduce reliance on family support in the housing market.
