Prime Minister Andy Burnham has announced a new Help to Buy-style scheme aimed at getting more first-time buyers onto the property ladder as well as providing a timely boost for the new-build market.
Although the full details will only be announced in the Autumn Budget, Your First Home is expected to allow first-time buyers to purchase a new-build property with a deposit of just 2.5%, supported by a government-backed equity loan worth 20% of the property’s value.
The loan is expected to be initially interest-free, with household income limits and local property price caps used to target the scheme.
But what impact could it have on the wider property market?
The new scheme follows the model of the previous Help to Buy equity loan, which enabled buyers to purchase a new build with a 5% deposit and a government equity loan of up to 20%.
That makes the experience of Help to Buy, which ran from 2013 to 2023 and financed more than 387,000 purchases, a useful guide to what the new scheme could achieve.
Lessons from previous schemes
First-time buyers (FTBs) are an important source of fresh demand for the housing market. In 2025, they accounted for more than half of UK house purchase mortgages.
Normally, an FTB buying from an existing homeowner starts a property chain, allowing the seller to move and potentially triggering several onward transactions.
Your First Home will work differently because it is restricted to new builds, meaning buyers will purchase directly from developers and will not immediately create chains in the second-hand market.
But it will bring people who might otherwise have remained tenants into home ownership. When those buyers eventually move, they will become part of the wider second-hand market, although that benefit will take longer to filter through than a standard purchase.
Could it get more homes built?
One of the main arguments for supporting new-build buyers is that greater demand gives developers more confidence that the homes they build will sell.
A government-commissioned evaluation published in September 2026 estimates that around 15% of new homes built during Help to Buy were additional properties that would not otherwise have been constructed, although the effect was strongest during the earlier years of the scheme.
That could be particularly useful now, with the government struggling to meet its target of building 1.5 million homes during this Parliament.
Will it push up house prices?
One criticism of the original Help to Buy was that increasing buyers’ spending power could allow developers to charge more.
New builds already attract a premium, estimated by the latest evaluation at around 5.5% over comparable second-hand properties. On top of that, homes purchased through Help to Buy were around 0.9% more expensive than comparable new builds bought without the scheme.
Researchers found evidence of a wider effect, too. By comparing similar housing markets on either side of the England/Wales border, where different Help to Buy schemes operated, they estimated that prices on the English side were around 2% higher than they otherwise would have been.
Help to Buy did generate additional housing, which helped absorb some of the extra demand. Whether Your First Home pushes up prices will therefore depend partly on how quickly developers respond by building more homes, as increasing demand without a corresponding rise in construction could push prices higher.
Will it reduce rental demand and rents?
Helping tenants become homeowners could reduce competition for rental properties and ease some pressure on rents.
But the experience of Help to Buy shows that any effect is likely to be minimal.
An evaluation found that 64% of FTBs using Help to Buy had previously rented privately. Combining this with estimates of how many could not otherwise have afforded to buy suggests roughly 50,000 to 100,000 renting households may have entered home ownership earlier over its ten-year lifespan.
England currently has around 4.7 million private renting households. On that basis, Help to Buy reduced tenant demand by around 0.1% to 0.2% per year.
What about the effects of negative equity?
The small deposits required under Help to Buy also raised concerns that buyers could become trapped if house prices fell, particularly given the premium attached to new builds. In addition, if it happened on a significant scale, it would affect confidence in the wider mortgage market and prompt lenders to scrutinise low-deposit lending more closely.
The risk could be greater under Your First Home because the minimum deposit is expected to fall from 5% to 2.5%, leaving buyers with less of their own equity in the property from the outset.
However, there is scant evidence that negative equity became a significant problem under Help to Buy. The scheme actually increased confidence among some lenders because the government equity loan reduced their exposure, with some reporting that this gave them greater scope to offer 95% mortgages elsewhere in the market.
Despite the smaller deposit, the proposed 20% government equity loan under Your First Home should provide similar protection for lenders.
Will it be worth the money?
With government finances under pressure, the cost of Your First Home will come under considerable scrutiny.
Over its ten-year lifespan, the Help to Buy equity loan scheme supplied £24.7 billion in government loans. However, because these were equity investments rather than grants, much of that money is eventually returned, with the amount recovered partly dependent on what happens to property prices.
The latest government evaluation estimates the net cost to the public sector was around £3.6 billion after repayments and other income were taken into account.
Against that, it estimates that Help to Buy generated £28.6 billion of economic benefits, largely through the additional homes built as a result of the scheme, giving it an overall net social benefit of £25.1 billion.
There is inevitably some uncertainty around precisely how much additional housebuilding was attributable to Help to Buy. But even using more cautious assumptions, the researchers concluded that the scheme produced benefits that exceeded its costs.
Whether Your First Home can deliver similar value will depend partly on how far developers respond to the additional demand by building more homes rather than simply raising prices.
The scheme, though, not only offers a potential route into home ownership for those who feel they have been locked out of the housing market, it could also bring in the steady stream of new buyers needed to keep it healthy over the longer term.
