Why the PM's 2.5% Deposit Still Needs a 20% Loan

With Your First Home, first-time buyers will be able to buy a new-build home with a deposit of just 2.5%.

Source: https://x.com/andyburnham/status/2103887433540436340

A deposit of just 2.5%. The Prime Minister posted that on 26 September 2026. It reads like a front-door key for the price of a short holiday.

The same scheme, on the BBC that day, puts a second number next to the first. First-time buyers in England would still need a loan worth 20% of the new-build's value. The 2.5% is the cash they bring. The 20% is the state's stake in the house.

GOV.UK, also published on 26 September, is blunt. It says 2.5% deposits, backed by 20% government-backed equity loans, for a new-build from a developer signed up to the scheme. The rest of the price is still a mortgage. A smaller cash pile is not a smaller price.

The tweet is about a new-build. It is not any home. It is not a house that already stands. If the builder has not signed up, the 2.5% door is shut. The buyer still needs a lender for the rest.

The BBC notes the policy is similar to Help to Buy, brought in in 2013. That scheme asked for a 5% deposit on a newly built home worth up to £600,000. Up to 20% of the cost was a shared equity loan, interest-free for the first five years. Your First Home cuts the cash deposit from 5% to 2.5%. The 20% loan stays.

Help to Buy ran until 2021, then a tighter version until 2023. A government evaluation found more than 387,000 properties were bought through it. Some 328,000 of those were first-time buyers. The same report said it did not remove affordability barriers in areas that were already relatively expensive. A lower deposit got people in. It did not make the expensive places cheap.

On a home at that old £600,000 cap, a 5% deposit was £30,000. A 2.5% deposit is £15,000. The state's 20% slice is still £120,000. The buyer still owes the rest to a bank. The cash at the start fell. The bill did not.

The BBC says there would be an initial interest-free period. More details sit in next month's Budget. Ministers have not yet confirmed an age limit or a cap on the price of the home. GOV.UK says there will be a household income cap and local price caps. The numbers come later. A scheme with the caps not yet named is a poster, not a product.

GOV.UK also says people could save hundreds of pounds a month compared with a 95% mortgage, because of that early interest-free spell. That is a cheaper monthly bill for a while. It is not a cheaper house. When the free spell ends, the 20% loan is still there.

Funding, the BBC says, is expected from existing budgets. Housing developers will pay towards running costs. GOV.UK says developers must make a contribution when they sign up. A fee on the builder is not a cheaper house. The Conservatives told the BBC it risks pushing up the price of new homes. The people who sell the homes welcomed the plan. The Home Builders Federation said a well-designed scheme can help households onto the ladder.

Look at the two figures. The tweet sells 2.5%. The press pack sells 2.5% plus a 20% state loan plus a bank loan for the rest, on a new-build only, from a signed-up developer, with the fine print in the Budget. A smaller deposit is not a cheaper house. It is a thinner slice of a price that still has to be paid.

The pattern is a tiny deposit sold in front of a 20% loan.

A 2.5% key still opens a 97.5% bill.

Sources: Andy Burnham on X, 26 September 2026 + BBC News, 26 September 2026 + GOV.UK, 26 September 2026

The Burnham Report — counter-commentary on what the Prime Minister says. Quotes are verbatim. Every claim is checked against a second source before publication.