Your First Home scheme: will first-time buyers still need help from parents?

Your First Home could cut the money parents need to provide for deposits – but financial experts warn the Bank of Mum and Dad isn’t going away. 

Prime Minister Andy Burnham has proposed a Your First Home scheme, which is designed to help first-time buyers get onto the property ladder with a deposit as low as 2.5%, amid concerns that many would-be homeowners are struggling to save enough for a deposit. 

Newspage analysis of figures, sponsored by Heron Financial, covering 5 October 2025 to 4 October 2026 show that 34% of Heron Financial's first-time buyer clients used a gifted deposit or inheritance.

That is broadly in line with the Government’s English Housing Survey 2024–25, which found 31% of recent first-time buyers had received help from family or friends.

Family cash made up a median 59% of the deposit. It covered more than half the deposit in 57% of cases, while in almost a quarter, 23%, family covered almost the whole deposit.

Without family money, 71% of those buyers would still have had at least a 2.5% deposit of their own, the minimum required under the Government’s Your First Home scheme.

More than six in ten, 62%, would still have had at least 5%, while 28% would have had 10% or more.

Across all the first-time buyers in Heron's data, just one in ten (10%) would have been left without a 2.5% deposit if family help had been taken away.

The findings have prompted mortgage experts to question how far the scheme could reduce first-time buyers’ reliance on family support.

Matt Coulson, Founder at Rickmansworth-based Heron Financial, said: "Roughly a third of first-time buyers lean on family, and where they do, family money tends to cover most of the deposit, often all of it. For a lot of young people, whether you can buy has come down to whether your parents can help, more than what you earn. 

"That's where Your First Home could make a difference. 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. If it works, it loosens the grip family wealth has on who gets to own a home. 

“The catch is two-fold. 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. Fix the deposit and the payment together and it helps. Fix only the deposit and it falls short.”

Malcolm Davidson, Director at Hull-based UK Moneyman, said the Bank of Mum and Dad may be evolving.

He added: “It had started to feel like buying a first home was becoming like hoping to be a professional tennis player – in other words not very likely without wealthy parents, so any scheme designed to change that ought to be welcomed. 

"When it comes to Bank of Mum and Dad however, I think ‘Bank of Family’ will overtake this phrase in due course. Many parents in their 40s and 50s are not in a position to help their kids onto the ladder, whereas the Baby Boomers one generation above can be, either with unused savings or property wealth via Equity Release.”

James Blackler, Managing Director at Oakstead Finance, said Your First Home will only “help at the margins”.

He added: “Single buyers needing more help than couples, and London buyers needing more than the rest of the country, tells you everything about how skewed this market has become, and it's exactly what we see day to day advising clients in London. 

"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. Your First Home will help at the margins, particularly for buyers with decent income but no savings cushion, but I'd be cautious about overselling it. 

"A lower deposit threshold doesn't fix stretched affordability once rates and living costs are factored in. It will shift some transactions forward, but it won't replace the Bank of Mum and Dad as the dominant force in this market.”

Tracey Dixon, Buy-to-Let Mortgage Specialist & Owner at Cardiff-based Pure Mortgage and Protection, said that affordability and the long-term cost of the equity loan remain critical.

She commented: "Replacing the Bank of Mum and Dad with another loan does not give buyers the same financial safety net. These figures show family money often covers most of the deposit. A gift can reduce borrowing without creating another repayment obligation. 

"A government equity loan must eventually be repaid. Your First Home could help some buyers overcome the deposit hurdle, but saving 2.5% does not mean they will pass a lender’s affordability assessment. I remain cautious. 

"Buyers need to understand how they will manage the mortgage, future equity-loan charges and eventual repayment, particularly if their circumstances change.

“Family support may therefore remain important even if the minimum deposit falls. Until the full terms are published, it is too early to declare this a solution. Getting someone into a home is only a success if they can afford to keep it.”

Richard Davidson, Mortgage Advisor at onlinemortgageadvisor.co.uk, said the figures show that family help remains a powerful advantage.

He commented: "Those lucky enough to have the Bank of Mum and Dad are using it, but there are still plenty of first-time buyers who can comfortably afford a mortgage and simply don't have that option. 

"Some parents may hold back a gift that would be a real sacrifice, but anyone who looks properly at the numbers will see that a smaller mortgage still makes sense, and if it works like Help to Buy, families could plan to keep that money back and use it to clear the equity loan at the five-year mark. It is possible to be cynical about these schemes, but I think it will broadly work, because its real job is to take risk off house builders so they keep building, and a lack of homes is the root of the problem. 

"The worry is that it becomes a licence to build cheaply, with homes that are out of keeping with the area or sold on poor leasehold terms, so the rules need to make sure buyers end up with something worth owning."

ENDS