Your First Home: what the new scheme means for housebuilders and the housing market

The Chancellor has today (October 28, 2026) confirmed the details of the Government's new Your First Home initiative, providing welcome clarity for first-time buyers, housebuilders and lenders.

The scheme gives first-time buyers access to new-build homes with deposits as low as 2.5% and, importantly, sets out the income and property price thresholds that will determine eligibility.

For housebuilders, the significance goes further: the scheme could strengthen demand at a time when affordability pressures, rising development costs and slower sales are constraining housing delivery.

How Your First Home compares with Help to Buy

In comparison with the Help to Buy (HTB) scheme, Your First Home provides for:

• A 2.5% buyer deposit, compared with 5% under HTB, alongside a 20% Government equity loan

• A household income cap of £110,000 to qualify, and £140,000 in London (whereas HTB had no general household income cap)

• Eligibility restricted to first-time buyers (similar to the later stages of HTB)

• A house price cap of £650,000 for inner London, £500,000 outside London and further regional caps based on median prices (HTB initially had a £600,000 national cap, before moving to regional caps)

• Interest-free for the first five years (same as HTB)

Housebuilders will be expected to make a contribution when signing up to the scheme, set on a sliding scale to protect smaller developments. First loans will be available from April 2027.

Why Your First Home matters

The industry has long called for the return of a government-backed equity loan scheme to help bridge the gap between wages, deposits and mortgage affordability. By lowering the upfront deposit requirement and combining it with a government-backed equity loan, Your First Home directly addresses that challenge. As with HTB, the scheme also has the potential to be cash-positive for Government, making it a welcome and pragmatic intervention.

Halving the buyer deposit requirement this time around should help even more aspiring homeowners onto the housing ladder. The income caps are lower than some in the industry may have hoped, but they will help address concerns about stoking house prices and disproportionately benefiting higher earners (who are, in any event, less likely to be first-time buyers).

What else changed for housing in Budget 2026

• No major changes to Building Regs during this parliament (other than for safety)

• BNG requirements to be removed from brownfield sites

• Land sold to housing associations shall not attract VAT – a welcome change that will simplify contractual structures, as from April 2027

• An additional £1.5 billion to deliver around 10,000 homes, prioritising Social Rent/Council Homes

What the Budget means for developers

For developers, the implications could be significant. Rising costs and well-intentioned regulation – including BNG, the Building Safety Act, the Building Safety Levy and the Future Homes Standard – have all added to the challenges of housing delivery, notwithstanding some improvements to the planning system. The various changes announced will definitely have a positive impact. In particular, better access to finance for first-time buyers has the potential to strengthen reservation rates, support build-out programmes and improve confidence across the development pipeline. At a time when developers continue to contend with cost inflation, planning delays and market uncertainty, measures that broaden the pool of active purchasers, support delivery and help more people onto the housing ladder are warmly welcomed.