Your First Home income cap could shut out public sector couples, experts warn

The government’s reported Your First Home income cap could shut out couples working in the public sector, experts have warned.

According to The Times, a £90,000 household income cap outside London, rising to £110,000 in the capital, could potentially exclude thousands of aspiring homeowners from the proposed Your First Home scheme.

The first-time buyer scheme, which is designed to replace the former Help to Buy scheme, could be out of reach for public sector couples in London.

Analysis by Newspage found that if two paramedics in London each earned the reported median annual earnings, including unsocial hours and overtime, of £60,797 (2025 Office for National Statistics data on earnings and hours worked, by industry and occupation), their combined household income would be £121,594 — exceeding the proposed £110,000 cap.

The full details of the scheme are expected to be announced in the Budget on 28 October. The government told The Times “this is speculation as full details are yet to be set out”.

However, it has led to fears the scheme could lock ordinary NHS couples and teachers out. 

Matt Coulson, Founder at Rickmansworth-based Heron Financial, believes the reported cap could leave many public sector workers ineligible for the scheme. 

He commented: "Capping it is the right instinct. The original scheme’s biggest flaw was helping people who’d have bought anyway, so some targeting is sensible. 

"The problem is that income is the wrong thing to cap on, because it doesn’t tell you whether someone can buy.

"Many couples on average public sector salaries are already over £90,000, yet in plenty of areas that couple can’t get near a first home. 

"A couple earning less in a cheaper region might manage comfortably without any help. What decides need is the gap between local prices and what you can borrow and save, far more than a single national salary line.

"A hard threshold makes it worse: being a pound over and getting nothing, while the couple next door qualifies, is hard to defend. 

"If they want this to work, tie eligibility to local prices and what’s being bought, and soften the edge with a taper. For now it’s all speculation, so the only sensible thing to tell anyone is to wait for the detail on the 28th before making decisions."

Experts have warned the proposed income cap could create a postcode lottery for first-time buyers.

Tony Sanchez, Founder at Bridging Loan Directory, said: "An income cap can target support, but household earnings alone do not tell you whether a couple can buy. Their deposit, local house prices and existing commitments matter too. 

"Two salaries can put a household above £90,000 without giving them the savings needed for a first home. A London allowance recognises geographical differences, but affordability pressures do not stop at the capital’s boundary.

"The government should explain how any income cap works alongside local property price limits, and assess who falls just outside it. I would not pick a replacement threshold without that evidence. The test should be whether the scheme helps buyers who can sustain the repayments but struggle to raise a deposit, while supporting additional housing supply. 

"These reported caps remain unconfirmed. Buyers should assess what they can afford under current arrangements and revisit their options once the Budget sets out the rules."

Mortgage experts have questioned whether the proposed scheme will genuinely help first-time buyers.

Harry Goodliffe, Director at Winchester-based HTG Mortgages, said: "If anything, I’d ask why a couple on £95,000 needs the government’s help to buy a house at all. That’s the bit that should worry people. A teacher and a nurse used to be a safe bet for a mortgage, and now we’re arguing about whether they qualify for a housing scheme. 

“The last Help to Buy pushed new build prices up, and developers did very nicely out of it, so I’m not sure a bigger version is the answer. It doesn’t help that the government leaks the plan on a Sunday and then calls it speculation on a Monday. Most of my first-time buyers will just wait for the Budget now.”

Public sector workers such as teachers, nurses and other working couples are potentially earning too much to qualify for support while still being unable to afford a home if the proposed cap goes ahead.

Samuel Mather-Holgate, Managing Director & IFA at Swindon-based Mather and Murray Financial, added: "The danger with a £90,000 cap is that it sounds generous until you put two ordinary public-sector salaries next to each other. A teacher and a nurse are not exactly plutocrats, yet they could find themselves treated as too wealthy for support while still priced out of the market. 

"That is the problem with cliff-edge policy: one pound of income can decide whether you get a leg-up or are left on your own. 

"London clearly needs different treatment, but so do many expensive commuter towns and regional hotspots. If ministers are already reviewing unfair cliff edges elsewhere in the system, they should be wary of creating another one in housing."

Your First Home: your questions answered

Questions answered by Matt Coulson, Founder at Heron Financial:

What is the Your First Home scheme?

Your First Home is the government’s planned scheme to help first-time buyers who can’t pull together a big deposit. The idea, as reported, is a revival of Help to Buy: you put down a small deposit, the government lends you a chunk of the purchase price as an equity loan, and you cover the rest with a normal mortgage. Because that equity loan sits alongside your deposit, your actual mortgage is smaller, which makes the monthly payment more manageable. It’s aimed at new-build homes from developers signed up to the scheme. The full detail is expected at the Budget on the 28th, so treat the specifics as provisional for now.

How much deposit do I need?

On what’s been reported, as little as 2.5%, which is where the scheme gets its appeal. To put that in real money, on a £250,000 home a 2.5% deposit is around £6,250, against roughly £12,500 for a standard 5% deal. The government’s equity loan, reported at around 20%, then covers a big slice of the price, so you need a far smaller deposit and a smaller mortgage than usual. The trade-off is that a smaller deposit means borrowing more overall, so the monthly cost still matters. And as with everything here, the numbers aren’t confirmed until the Budget on the 28th.

My household earns £112,000 in London — does this mean I won’t be eligible?

On the numbers being reported, yes, you’d just miss out. The figure doing the rounds is a £110,000 household cap inside London, and at £112,000 you’d be a couple of thousand over it. I’d stress heavily that none of this is confirmed. The government has called it speculation, and we won’t know the real thresholds until the Budget on the 28th. It might land higher, lower, or be structured completely differently. So I wouldn’t treat £112,000 as a firm cut-off yet. Being two thousand pounds the wrong side of a line you can’t even see yet is exactly the problem with a hard cap.

⁠What issues could the Your First Home cap cause?

A few. The biggest is the cliff edge. If the limit is a hard line, a pound over it and you get nothing, while the couple next door who earn a pound less get full support. That’s very hard to justify. Then there’s the fact that income doesn’t really tell you whether someone can buy. A household on a decent salary in an expensive part of London can be nowhere near affording a first home, while a lower earner in a cheaper area manages fine. A cap can also nudge people to turn down a pay rise or extra hours just to stay under it, which helps nobody.

Is the Your First Home cap fair?

The instinct behind it is fair. The old Help to Buy spent a lot helping people who would have bought anyway, so aiming support at those who genuinely need it makes sense. Where I think it struggles on fairness is the tool itself. A flat income cap is blunt, because what actually determines whether you need help is how far local prices sit above what you can realistically borrow and put down, more than the size of your salary. Two couples on the same income in very different places have completely different needs. A smarter version would scale with local house prices and ease out gradually, so nobody is punished for being marginally over.