Your First Home scheme could ‘double new-build choice’

The number of new-build homes within reach of an average single first-time buyer in England could more than double under the Government’s proposed Your First Home scheme, Rightmove says.

It estimates that choice would increase by 114% compared with buying using a 5% deposit and a 95% mortgage.

The maximum price affordable to an average solo buyer would rise from £216,758 to £265,703, an increase of nearly £49,000.

The cash deposit required would fall from £10,838 to £6,643.

The analysis assumes a buyer can borrow 4.5 times the average annual salary.

It compares a 5% deposit and 95% mortgage against the scheme’s structure of a 2.5% deposit, a 20% Government-backed equity loan and a mortgage covering the remaining 77.5%.

Regional differences

The North West would offer solo buyers the greatest choice, with 31% of available new-build homes falling within reach, up from 20% today.

Yorkshire and the Humber would see one of the biggest improvements, rising from around 10% to 22%, while the North East would climb from 5% to 14%.

London would remain the most difficult market, with the proportion of affordable new-builds rising from 1% to 5%.

What we know about the Your First Home scheme so far suggests it could make a meaningful difference to the choice available to first-time buyers.”

Alex Slater, Rightmove’s Director of New Homes, says: “Early analysis based on what we know about the Your First Home scheme so far suggests it could make a meaningful difference to the choice available to first-time buyers, particularly those purchasing on their own.”

He adds: “The combination of a smaller deposit and a 20% equity loan could increase the maximum price an average solo buyer can afford by almost £50,000, while also reducing the amount they need to save upfront.”

Final details announcement

Slater says the impact will vary significantly between local markets, with some areas seeing an increase from a very limited base and others gaining access to a far wider pool of property.

He says: “The final details announced at the Budget will be crucial, particularly any income and property price caps and regional variations.”

Nathan Emerson, Chief Executive of Propertymark, says: “Helping solo first-time buyers overcome the deposit and borrowing hurdles could make a real difference, particularly in areas where new-build homes are already within reach of average local earnings. But increasing purchasing power does not automatically mean buyers will find the right home at the right price.

“In practice, affordability remains a balance between the mortgage a buyer can secure, the deposit they can raise and the homes available in locations where they need to live. The impact of the scheme will therefore vary significantly between local markets, and its final rules will be important in determining how many buyers can actually benefit.

“For those who can access it, a smaller deposit and additional borrowing capacity could open up more choice. The key will be ensuring that increased purchasing power translates into genuinely accessible homes rather than simply allowing buyers to compete for a limited supply.”