New £340,000 price cap confirmed for Leicester first-time buyers under Government scheme
Aspiring homeowners in Leicester could take their first step onto the property ladder with a deposit of just £8,500, following confirmation of the local price cap for the Government’s new Your First Home scheme.
Leading Midlands housebuilder Davidsons Homes has welcomed the announcement, which follows new measures unveiled in the Autumn Budget on 28 October aimed at making homeownership more accessible to first-time buyers.
The Government has now confirmed that properties valued at up to £340,000 in the Leicester district could qualify for the scheme, which will allow eligible first-time buyers to purchase a new-build property with a deposit of just 2.5 per cent, supported by a Government-backed equity loan worth 20 per cent of the purchase price, interest-free for the first five years.
For someone purchasing a home at the £340,000 local price cap, this could mean finding a deposit of just £8,500, compared with £17,000 for a conventional 95 per cent mortgage. The Government’s equity loan would contribute a further £68,000 towards the purchase, reducing the mortgage required to £263,500.
The scheme forms part of a £4.7 billion Government funding commitment, with applications expected to open in February 2027 and the first property sales anticipated from April. It will be available to eligible first-time buyers with household incomes of up to £110,000 outside London, subject to local authority property price caps.
For many aspiring homeowners in Leicester and the surrounding villages, particularly younger buyers and those currently renting, saving for a deposit remains one of the biggest challenges to getting onto the property ladder.
Jason Glover, Operations Director at Davidsons Homes, which builds new homes across the Midlands, believes the announcement could make a real difference.
He said: “For so many people, owning their first home is a huge ambition, but saving up for the deposit can feel like an impossible task, particularly when they’re already paying rent and managing everyday living costs.
“Anything that helps to bring that first step within reach is a positive move, and it’s encouraging to see the Government recognising the challenges facing first-time buyers.
“The proposed Your First Home scheme has the potential to open doors for people who might otherwise have felt that homeownership was still years away. A smaller deposit could make a significant difference, particularly for those who can comfortably afford monthly mortgage repayments but are struggling to save the initial lump sum.
“Of course, the detail will be important. We need to make sure that any new scheme is straightforward, accessible and genuinely helps the people who need it most.
“At Davidsons Homes, we’re passionate about helping people find somewhere they can really put down roots. Buying your first home is a huge milestone, and we want to see more people have the opportunity to experience that.
“The announcement is a welcome step in the right direction, and we look forward to seeing how the scheme develops and the difference it could make to buyers across the Midlands.”
Davidsons Homes currently offers a range of new homes across Leicestershire, including developments in and around Leicester, alongside sites across Northamptonshire and the surrounding counties.
