What was announced

On 26 September the government announced Your First Home, a scheme for first-time buyers purchasing a new-build home in England from a participating developer. As proposed, the buyer puts down a 2.5% deposit, the government lends 20% of the price as an equity loan, and a mortgage covers the remaining 77.5%. The loan starts interest-free, although the length of that period has not yet been confirmed.

Household income caps of £90,000, or £110,000 in London, are expected, along with local price caps. Full details are due at the Budget on 28 October, with pre-registration expected to open by the end of the year.

Why investors should pay attention

On a £300,000 new build, the deposit falls from £15,000 at 5% to £7,500. The deposit is the single largest barrier to buying for most renters, and the scheme halves it.

  • It widens the resale market for new-build apartments. Investors who buy off plan eventually sell, and first-time buyers are the natural buyers of one and two bedroom flats. More first-time buyers able to fund a new-build purchase means more potential buyers at exit.
  • Developers expect to build more. Bellway has said the scheme could lift its homebuilding by around 10%, a sign that the industry sees real demand behind it.
  • The structure is familiar. Help to Buy used the same model in England from 2013 to 2023, so lenders, conveyancers and developers already know how to run it.

Where we are cautious

Bellway also warned that some buyers may delay purchases while they wait for the launch, so a pause in first-time buyer demand between now and pre-registration is possible. Price caps have not been published, and a cap set below local new-build values would limit the benefit in some areas. We will not price anything on the scheme until the Budget confirms the detail.

The bottom line

A policy designed for first-time buyers is good news for anyone who owns, or is buying, new-build stock that first-time buyers will one day want. It widens the pool of funded purchasers at exactly the price point where most investor apartments sit. Our current new-build developments show the price points we are offering today.