“Your First Home”: what could the new scheme mean for construction and real estate?
The Government’s new “Your First Home” scheme could give the new-build market a welcome lift, particularly for first-time buyers who are struggling to get together a deposit.
The ‘Your First Home’ scheme is intended to help first-time buyers in England purchase a new-build home with a 2.5% deposit, alongside a government equity loan worth 20% of the property’s value. The loan will initially be interest-free, with more detail expected at the October Budget.
For housebuilders and the wider property sector, there is certainly potential here. But the key question is whether the ‘Your First Home’ scheme will translate into more homes being built, rather than simply giving buyers greater spending power in a market where supply remains tight.
A potential boost to new-build demand?
The obvious benefit for housebuilders is that more first-time buyers could potentially afford to buy.
That could be particularly helpful for SME housebuilders whose developments are aimed at entry-level buyers. Stronger sales could improve cash flow, reduce the amount of capital tied up in completed homes and give developers greater confidence about future receipts.
However, the impact is unlikely to be the same everywhere.
Income limits and property price caps will determine who can use the scheme, while regional differences in house prices could affect its reach. For developers, the real test will be whether it brings genuinely new buyers into the market, rather than simply enabling existing buyers to pay more.
Will it actually lead to more houses being built?
This is where things get interesting for the construction sector.
The Government is presenting Your First Home as more than a home ownership initiative. It also wants it to give housebuilders greater confidence to build, at a time when developers are dealing with higher construction costs, funding pressures, planning issues and ongoing viability challenges.
Latest figures show that 35,910 new homes were started in England in Q2 2026, up 20% on the same quarter of 2025. However, completions fell 3% on the previous quarter, highlighting the continued challenges around delivery.
And there is an important difference between creating demand and creating supply.
Helping someone buy a home does not, on its own, solve the planning, infrastructure, labour, materials or funding issues that can hold a development back.
For SME developers, the potential opportunity is therefore where stronger buyer demand could help unlock existing development opportunities or improve the viability of schemes that are currently marginal.
What can we learn from Help to Buy?
There is a useful precedent in Help to Buy.
The Government’s evaluation found that the scheme supported hundreds of thousands of purchases, including by first-time buyers, but its impact varied by location. There was evidence of greater price increases in some already expensive markets.
That highlights a potential risk for Your First Home: if purchasing power increases faster than housing supply, some of the benefit could feed through into prices rather than improving affordability or increasing construction.
What could the scheme it mean for SME housebuilders?
For SME housebuilders, stronger demand should mean faster sales, improved cash flow and greater confidence when planning future development.
There is also a potential land value issue. If demand for eligible new-build homes increases materially, some of that additional value could ultimately be reflected in land prices.
Another consideration will be the contribution required from developers to participate in the scheme and how that cost could affect already tight project margins.
With the detail still to be confirmed at the Budget, developers will need to understand the eligibility criteria and implementation timetable before factoring the scheme into development appraisals or land-buying decisions.
The empty homes angle
There is also another part of the Government’s announcement worth watching for the wider real estate sector.
Proposed changes would make it easier for councils to bring long-term empty properties back into use, including reducing the period before an Empty Dwelling Management Order can apply from two years to six months.
This could create opportunities for contractors, refurbishment specialists, property managers and investors involved in bringing vacant homes back into use. Owners of long-term empty properties will also need to consider what the changes could mean for their assets.
What should businesses be thinking about now?
There is still a lot we don’t know about Your First Home, so it would be premature to build the scheme into development assumptions. But there is value in thinking through the potential impact now.
For SME housebuilders and property businesses, the key questions are:
- Which current or planned developments could become more viable if first-time buyer demand increases?
- How sensitive are current appraisals to changes in sales values and rates?
- Could improved demand change the viability of sites currently in the land bank?
- What would stronger sales rates mean for cash flow and funding?
- Could any additional costs associated with the ‘Your First Home’ scheme affect project margins?
Final thoughts
Your First Home could provide a useful boost to the new-build market, but it will not remove the wider challenges around planning, construction costs, funding and viability.
Much will depend on whether the ‘Your First Home’ scheme generates genuinely additional demand and whether developers have the confidence and capacity to respond.
The Budget on 28 October should provide some of those answers. At Cowgills, we’ll be looking closely at the detail and what it could mean in practice for SME developers, housebuilders and property investors.
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