Your First Home could help buyers and builders — if we learn from Help to Buy  

We welcome the Government's expectation that participating developers will contribute to the scheme's costs. It is fair that an industry benefiting from extra sales should help pay for it. But the size of that contribution, the overall cost of the scheme and the Government's financial exposure haven't been published yet.

Learn from Help to Buy

Help to Buy shows both what an equity loan scheme can do and where it can go wrong. An independent evaluation commissioned by the Ministry of Housing, Communities and Local Government found that 46% of customers said they couldn't have bought a home without it. It also found that the scheme increased housing supply, with developers saying stronger demand gave them the confidence to build.

The same evaluation found that Help to Buy customers paid about 1% more than buyers of comparable new builds. New builds themselves cost around 5.5% more than comparable existing homes over the period studied, and around 8 to 9% more in London. One part of the evaluation, comparing areas either side of the England–Wales border, estimated that Help to Buy raised overall house prices there by about 2%. The wider effect on prices is less certain, but the lesson is that government support mustn't become a reason to charge buyers more.

Mortgage conditions have also changed. Bank of England records show Bank Rate was 0.1% for much of 2021, and it was held at 3.75% in September 2026. Bank Rate isn't the rate buyers pay, but it shows why affordability has to be tested against today's borrowing costs. A smaller deposit is little use if the monthly mortgage payment is out of reach.

The Government should therefore compare the prices scheme buyers pay with those of similar new builds and existing homes, and publish how many extra homes are built as a result. Local property price caps mustn't become targets for developers to price up to.

Will it work in London?

London is a particularly tough test. Help to Buy offered an equity loan of up to 40% in the capital, while the new proposal is for 20%. HM Land Registry's July 2026 House Price Index shows the average London first-time buyer paid around £467,000. At that price, a 2.5% deposit would be roughly £11,700, but the buyer would still need a mortgage of about £362,000. At an illustrative borrowing limit of 4.5 times income, that would need a household income of roughly £80,000, before a lender looks at other commitments or a flat's service charge. The deposit is only part of the affordability problem.

We don't yet know the proposed household income caps or local property price caps. If they are set too low, Londoners could qualify for the scheme but be unable to afford an eligible home, or be able to afford a home but be shut out by the income cap. The Government should test the caps against actual local new-build prices and mortgage lending limits. It should also consider whether London needs a higher equity loan, weighed against the risk of pushing prices up.

Buyers of new-build flats putting down very small deposits face a further risk. HM Land Registry's July index shows London flat and maisonette prices fell 6.6% over the previous year, compared with a 3.3% fall across all London property. Even a modest fall in value could wipe out a buyer's small initial stake. High or rising service charges, building safety concerns and onerous lease terms can also make a flat harder to afford, remortgage or sell.

Helping people buy flats while leaving leasehold problems unresolved would be short-sighted. We welcome the commitment to bring forward the Commonhold and Leasehold Reform Bill before Christmas, including powers to cap excessive administration and permission fees. The Government now needs to move quickly on its full leasehold reform programme, including greater transparency and control over service charges.

Getting out of the scheme matters as much as getting in. Some Help to Buy owners told the independent evaluators that repaying their equity loan when they wanted to sell was costly and stressful. They described valuation deadlines and the difficulty of coordinating the lender, surveyor, solicitor and loan administrator. We shouldn't create another long-term loan that leaves people unsure what they owe and how to pay it off, as has happened with student loans. Your First Home needs clear terms from day one: when interest starts, how it changes, how the loan is valued and repaid, and what happens when an owner sells or remortgages.

Advice for buyers, and what we're asking of the Government

First-time buyers should look into Your First Home, but they shouldn't assume it is their only route into ownership, or that they can't buy until it launches. There are more mortgage options than many people realise, including 100% mortgages for eligible renters and family-backed mortgages that let parents use their savings as security without giving the money away. Eligibility and costs vary, so talk to a mortgage adviser before ruling yourself out.

One strength of Help to Buy was that people knew about it. It encouraged people who thought home ownership was beyond them to find out what was possible. Your First Home could do the same, as long as buyers are encouraged to compare all their options. Ask an adviser to show you the total cost of each route, including what you would pay once any interest-free period ends. Budget for service charges, insurance, maintenance and moving costs. Before buying a flat, ask your conveyancer to check the lease, service charge accounts, planned major works and building safety information. A low deposit only helps if the home stays affordable and can be sold.

We want the Government to set realistic local price and income caps, stop scheme support being absorbed into new-build prices, publish fair and understandable equity loan terms with a simple repayment process, speed up leasehold reform, and measure how many extra buyers and homes the policy delivers.

It should also look beyond a single new-build scheme. Scrapping stamp duty for people buying a home to live in would cut the cost of moving across the market, and helping existing owners move can free up homes for first-time buyers. At the very least, the Government should raise the stamp duty thresholds for first-time buyers so they don't pay tax on their first home, including in more expensive areas such as London. Any change should go alongside measures to increase supply and keep prices affordable. The aim should be lasting home ownership and a housing market where people can move as their lives change, not just a quicker way in.