Your First Home is a sales-rate policy

On 26 September 2026 the government announced Your First Home, an equity loan for first-time buyers of new-build homes in England. The government's release gives it two purposes. The first is the deposit barrier. For anyone who owns land, promotes it or plans for it, the second matters more. The scheme will "act as a much-needed stimulus to support the market and boost housing supply".

That is a claim about build-out, and build-out on a consented site is governed by one number.

Why a buyer scheme is a supply policy

A housebuilder paces a site to the rate it can sell without discounting. Letwin's review of build-out found in 2018 that the rate at which the market absorbs a standard product is the "fundamental" driver of slow build-out on large sites. The CMA confirmed it in 2024: builders sell at the local absorption rate, "the rate at which houses can be sold without housebuilders needing to reduce their prices".

The rate is measured as net private sales per outlet per week, and it has been falling. Taylor Wimpey reported 0.75 for the first half of 2026 and 0.55 for the four weeks to 26 July. It said higher mortgage rates had stretched affordability "particularly for first time buyers and customers in the South of England", and asked the government for a new equity loan scheme.

Planning reform works on a different constraint. The August 2026 framework widens where permission can be granted. It does nothing for how many homes a permitted site sells in a week. A buyer subsidy acts on that. It moves the absorption rate, and through it the build-out figures in a housing trajectory and the completions the Housing Delivery Test counts.

How the market priced it

The first day of trading after the announcement priced the scheme across the supply chain, not only the builders.

The spread is the useful part. Ibstock rose most, and a brickmaker gains from homes started rather than homes sold, so the market read the scheme as a build-out story. Mortgage Advice Bureau, a broker, rose 5.1%. Berkeley, which builds mainly in London and the south of England, rose as much as 7.3% during the day and closed 0.2% lower. One day's trading cannot say whether that reflects a view on the price caps, but it is the question the caps will answer.

The strongest counterweight to the rally came from Noble Francis, economics director of the Construction Products Association, on the same morning. He expects the scheme to have far less effect than the original Help to Buy, because in 2013 the problem was "a lack of enabled demand" and now it is cost. Without action on the government's own added costs, he wrote, "the sites still remain unviable". We think that is right for the marginal site, and it is why the sales-rate effect will show up first on outlets that already work.

What the last one did

Help to Buy is the precedent, and its final evaluation was published eleven days before this announcement. The findings are specific enough to plan around.

• Supply. About 15% of new builds in England from 2013 to 2023 were the result of the scheme.
• Who it reached. 54% of customers said they could have bought without it.
• Prices. About 2% higher along the England and Wales border, with larger effects in areas that were already less affordable.
• Builders. Positive effects on developers' revenues, pre-tax profits and margins.

The supply figure needs its context. It covers ten years that were mostly at very low interest rates. The evaluation found "little evidence that the change to Help to Buy 2 (in 2021) or the end of the English scheme (in 2023) had a substantial effect on new housing supply", partly because high loan to value mortgages had come back. Help to Buy 2, first-time buyers only with regional price caps, is the closer precedent for Your First Home.

Dependence was high among the largest builders. Barratt sold 36% of its completions through Help to Buy in both 2018 and 2019. The CMA's reading of the evidence was that stimulating demand without addressing supply risks the gains going "primarily to housebuilders and other sellers rather than buyers".

Where it lands in an appraisal

Most land is bought on a residual valuation, which the CMA also confirmed. The builder bids what the land is worth after its costs and margin, on the price and sales rate it expects. A faster sales rate shortens the period finance is outstanding and brings revenue forward. Both raise the residual. So a scheme expected to hold up the sales rate for several years is priced into land bids.

The Help to Buy evaluation records this. Developers described "intense competition for land and land banking" during the scheme. It also measures the scheme's benefit to society as land value uplift. That is the standard appraisal method. It is also a plain statement of where the value was found.

The caps decide the geography

When Help to Buy was restricted in April 2021, prices were capped by region at 1.5 times the average first-time buyer price. In high-value districts that all but ended it. Cotswold District shows how: it recorded 628 Help to Buy purchases across the scheme's life, and 9 under the capped version, none after 2021. The South West cap was £349,000. The median new-build home in the district sold for £565,000 in the year to March 2025.

This time the release promises "local" caps. How local they are will decide whether the scheme reaches high-value rural districts at all, or concentrates in the markets where Help to Buy already added supply without much effect on price.

What we are watching

Four numbers at the Budget will tell us how far this moves the market. The cap level relative to local new-build prices. The income cap, which is the government's answer to the 54%. The developer contribution, which is the only term that asks anything of the sellers. And the length of the interest-free period, because Help to Buy's interest began in year 6 and a shorter holiday changes the buyer's sums.

Our view is that the scheme will show up in sales rates on outlets that qualify within months, and in land pricing on those same markets soon after. Anyone appraising a site, or testing a housing trajectory, should wait for the caps before assuming either.