2.5% deposit, £600,000 price cap: How UK's new home-buying scheme will work

The UK government is set to revive its Help to Buy-style scheme, allowing eligible first-time buyers to purchase new-build homes with a deposit of just 2.5 percent and a government-backed equity loan of up to 20 percent of the property's value.According to Reuters, the new “Your First Home” scheme is expected to be confirmed in the October 28 Budget. The programme is aimed at helping first-time buyers overcome the deposit barrier while also supporting demand for new-build homes and Britain's housing construction sector.How the new scheme will workUnder the scheme, eligible first-time buyers will be able to purchase a new-build property with a 2.5 percent deposit, while the government will provide an equity loan of up to 20 percent of the property's market value.The buyer would then take a mortgage covering 75 percent of the property's value.