Your First Home Price Caps: Three Limits to Check
The government has published the local price caps for its Your First Home scheme, ranging from £215,000 in South Tyneside to £650,000 in 14 London local authorities, Today's Conveyancer reported on 4 November. The average cap across England's 296 local authorities is £361,250. If you're a first-time buyer hoping to buy a new-build with a 2.5% deposit, that list answers the obvious question: how much can I spend here? But the cap is only one of three limits that matter, and the other two kick in at lower prices.
What the Your First Home Price Cap Does and Doesn't Tell You
Your First Home pairs a deposit of at least 2.5% with a government equity loan worth 20% of the purchase price. You need a repayment mortgage from a participating lender, a household income of no more than £110,000 (£140,000 in London), and a new-build from a participating developer. First applications open in February 2027, with first sales expected that April.
The cap is simply the maximum price for a home in that area. It doesn't guarantee there will be suitable homes beneath it. Analysis by SAM Conveyancing puts the average new-build at £396,889 in May 2026, against £283,194 for an existing home. Before you get attached to a plan, check your area's cap on GOV.UK and compare it with what local developers are really charging.
The £500,000 Stamp Duty Limit
Stamp Duty Land Tax was left unchanged in last week's Budget, which matters more than it might sound. First-time buyers in England pay nothing on the first £300,000 and 5% on the portion up to £500,000. Go a pound over £500,000, though, and first-time buyer relief disappears altogether.
Most of the country won't get near that figure, but 24 London local authorities have caps of between £500,000 and £530,000, and 14 more sit at £650,000. So in those areas, a home can qualify for the scheme and still fall outside the relief.
The difference is real. A first-time buyer paying £500,000 owes £10,000 in stamp duty. At £550,000, standard rates apply and the bill is £17,500, which is more than the £13,750 minimum deposit on that home. Under Help to Buy, stamp duty was charged on the full purchase price rather than your share of it. Expect the same here unless the final terms say otherwise, and remember the bill normally has to be paid from your own funds at completion.
The £450,000 Lifetime ISA Limit
You can use a Lifetime ISA alongside Your First Home, but only penalty-free on a home costing £450,000 or less. That limit hasn't moved since the ISA launched in 2017.
The Budget did soften the blow. Since 29 October, withdrawing to buy above the limit costs 20% rather than 25%. In practice, that means you hand back the government bonus and any growth on it, but keep what you paid in and the interest on it. So £800 of your own money, topped up to £1,000 by the bonus, comes back as £800. Your conveyancer normally handles a Lifetime ISA withdrawal, so raise this early: the paperwork can't be left until the week of completion.
What's Still Unconfirmed About the Equity Loan
Full eligibility rules and repayment guidance, including minimum repayment amounts and fees, won't be published until before applications open. The lists of participating developers and lenders are also outstanding. What we do know is that you repay 20% of your home's value at the time, not the sum you borrowed, and interest starts in year six at 1.5%, rising to 3% from year seven.
Pre-registration opens by the end of December and doesn't commit you to anything. Paying a reservation fee on a specific plot is different. Avoid doing that until the terms are published and a solicitor has reviewed them alongside the developer's contract.
What Should You Do Next?
If you're planning to use Your First Home, it's worth working out early which of these limits applies to the homes you're looking at. Our first contact team can match you with an experienced conveyancing solicitor near you in the QualitySolicitors network, who can check your likely stamp duty bill, explain how your Lifetime ISA fits in and guide you through the equity loan paperwork. Get in touch whenever you're ready, and we'll help you take the next step with confidence.