UK's 'Your First Home' Scheme Sparks Debate Over New-Build Exclusivity

The United Kingdom's 'Your First Home' scheme, set to replace the Help to Buy initiative, has been met with anticipation but also with concerns regarding its limitation to newly constructed properties. This restriction echoes debates surrounding its predecessor, sparking discussions about whether the scheme should be expanded to include existing homes.

Announced in September, 'Your First Home' aims to assist first-time buyers by allowing them to purchase a property with a 2.5% deposit. The scheme offers an equity loan of up to 20% of the property's value, which is intended to reduce mortgage costs in the initial years of ownership. However, this loan is interest-free only for a limited period.

Rationale Behind New-Build Focus

The government's rationale for restricting such schemes to new-builds is primarily to stimulate the housing market and encourage construction. By increasing demand for new properties, the aim is to incentivize housebuilders to increase their output, thereby benefiting the broader economy. Mark Harris, chief executive of mortgage broker SPF Private Clients, explained that the government hopes this policy will encourage developers to build more homes to meet the heightened demand.

The Help to Buy Precedent

The previous Help to Buy scheme, introduced in 2013, operated under a similar model, offering first-time buyers a 5% deposit option for new-build homes. It ran until 2022. Under Help to Buy, the government provided equity loans ranging from 5% to 20% of the property cost, with a higher threshold of 40% in London. Interest on the loan was deferred for five years, and the borrowed amount had to be repaid within 25 years or upon the sale of the property.

Official figures indicate that over 387,000 properties were purchased through the Help to Buy equity loan scheme between April 2013 and March 2023, supporting approximately 328,000 first-time buyers. The total value of properties sold under the scheme reached around £109.2 billion.

Criticisms and Calls for Expansion

Despite its reach, the Help to Buy scheme faced criticism. The Institute for Fiscal Studies (IFS) noted in April 2026 that the scheme's limitation to new builds, which are not widely available in all areas, meant it did not significantly improve housing affordability for many. The IFS concluded that Help to Buy in England had only a minimal impact on making homes affordable.

More recently, research from SAM Conveyancing estimated that the Help to Buy scheme inflated new-build property prices by 70.1%. During the same period, housing delivery stagnated, with annual completions averaging 152,791, falling short of the 2007 peak of 223,590. SAM Conveyancing concluded that government equity loans injected billions into the new-build sector, inflating prices without substantially stimulating construction.

Data from HM Revenue & Customs reveals a significant price disparity: new-build homes currently command a 40.1% premium over older properties, averaging £396,889 compared to £283,194 for existing homes. To mitigate the risk of another