Your First Home

The government has just introduced a new incentive for First Time Buyers in what is promised to be a big boost to the housing market. What impact could it have and is it what is needed?

2026 has certainly been a challenging year for the property market, far more so than I and many others expected. As 2025 ended, we were confident that interest rates would come down in the first monetary meeting in February 2026. With four members of the nine member panel voting for a 0.25% reduction and five for it to remain the same, it was a tight decision. However, this decision set the scene for the rest of the year so far.

It has been expected that something might be in the pipeline considering how sluggish the property market has been all year.

We are also expecting further news following the six week Home Buying and Selling Reform Consultation that concluded in December 2025. Will new legislation help the government hit the target set in 2024 to build 1.5 million new homes during the course of parliament? It came as no surprise to those in and around the industry when Housing Secretary Angela Rayner acknowledged this month that there is only a "slim chance" of hitting this number.

So what is the idea behind the Prime Minister’s plan? The latest announcement from Andy Burnham is aimed at kick-starting the property market for first time buyers with the launch of Your First Home scheme. It’s similar to the Conservative and Liberal Democrats coalition Government "Help to Buy" scheme that launched in 2013 and closed in 2021. That one required buyers to contribute a minimum 5% deposit; the proposed new scheme will require buyers to contribute a minimum deposit of 2.5%. The details are yet to be announced in full - details are said to be confirmed at the next Budget at the end of October, but registration for the scheme is due to open by the end of 2026.

The scheme will only be available if you buy a new home, and speculation expects the government to put a cap on the maximum purchase price and on applicants' income. 

As usual, some responses might be tilted in favour or against depending on political persuasion but looking at it objectively,  there are clearly some positives whilst also acknowledging it isn't going to be a solution to other market issues. Although only applicable to first time buyers buying a new build home and therefore not boosting the secondary market, I do believe it might help indirectly with generating a "feel good" factor across the property industry and any boost to the economy can have a knock effect to the housing market. 

However, there are still significant details missing that give me cause for concern:

• It sounds as though there will be a blanket price cap, and not one that varies across the regions reflecting the difference in local average house prices.

• It’s only applicable to First Time Buyers buying a new build, whereas I feel it should also be available to couples who are separating and might be struggling to stay on the housing ladder.

• There is no indication how long the Interest Free term period will be, and what will be charged afterwards. Will it be a fixed interest rate, giving stability and confidence to the buyer or a variable rate based on the rate set by the Bank of England?

• We also haven't been given any information on when the loan would have to be repaid.

On a positive note, we know that the buyers will only need to have saved a deposit of 2.5%, which is 50% lower than the previous Help to Buy scheme. 

It’s clearly encouraging that something is being done, but I wonder if there may have been more scope here by combining something like the Your First Home scheme with an adjustment to stamp duty, which would help everyone buying and selling a property. 

I also go back to concerns about the house buying system as a whole and what more could be done following the conclusion of the Government’s Home Buying and Selling Reform consultation consultation process - but that is for another blog!

Thanks for reading and feel free to share and pass this on. And if you’d be interested in writing a guest blog about a topic related to buying and selling and owning your own home do get in touch.