Prime Minister announces ‘Your First Home’ buying scheme
Thought Leadership by Olivier Januiax Founder of Nestlink
‘Somewhere in a housebuilder’s head office on an unusually warm September Monday morning, a finance director opened the news and did something finance directors rarely do in public.
He smiled.
The Prime Minister had just announced Your First Home.
First-time buyers can buy a new-build home in England with a 2.5% deposit, and the government will lend them up to 20% of the price through an equity loan, interest-free for a while.
How long a while is, what happens afterwards, what the price cap will be and who qualifies will all be revealed in the Autumn statement by the new Chancellor. Very much in the manner of a magician who has shown you the hat but not yet bought the rabbit.
The market did not wait for the rabbit.
By the close, Vistry’s shareprice was up 22%, Persimmon and Taylor Wimpey 15% each, and roughly £2bn had been added to the sector’s value. Not a single additional buyer had collected a key. It is rare for a market to say so plainly who a policy is for, and it was the only part of the announcement that needed no further detail.
To be fair to Burnham, and I do want to be fair, he is aiming at the right target. He wants to help first-time buyers “especially those who can’t call on the Bank of Mum and Dad,” and that sentence sums up the problem with British housing.
Home ownership has quietly become something you inherit, and a Prime Minister saying so out loud is progress. The diagnosis is right. The prescription is a repeat of one we already know has side effects. Calling it a tiny plaster over huge bleeding wound is barely an exaggeration.
Meet the intended recipient.
Let us call her Jess. She is 27, a nurse, renting a flat in Warrington with a boiler midway through an existential crisis. She has no Bank of Mum and Dad, only a Mum and Dad who send her supermarket vouchers and occasionally a link to a Facebook property listing with the message “Is this near you?”
Jess is exactly who the scheme is for. A few Saturday mornings later, Jess walks into a sales office on a new estate on the edge of town. It smells of coffee and ambition.
There is a model village under Perspex and a very enthusiastic young man called Tyler. The two-bed flat on the second floor is £230,000, (which is the government’s own worked example, so let us use it). Jess puts down £5,750. The taxpayer puts in £46,000.
Her mortgage is £178,250. Tyler mentions, a little too fast and mumbled, that there is a modest estate management charge, a recommended solicitor who can move very quickly, and a reservation fee payable today to secure the plot, because “Phase Two is flying.”
Phase Two is always flying and the 3.1% hangover
Here is the bit Tyler does not have on a laminated card. Jess owns 2.5% of her flat. Her mortgage debt is fixed. The government’s 20% share goes up and down with the value of the flat. Do the arithmetic and a fall of just 3.1% in the flat’s value wipes out her entire deposit. No crash needed, just a devaluing of the new build premium in a slightly flat market.
A new-build flat is a lot like a new car.
Except the car does not come with a management company and you usually do not need an MOT for a few years. The new-build premium, the extra you pay for fresh paint and nobody else’s carpet, disappears the moment keys change hands, because the next buyer is purchasing a used flat.
Plumplot’s analysis of Land Registry data found that of new-build flats resold within five years in 2025, 41% sold at a loss. For houses the figure was 14%. As a result, the ‘Your First Home’ scheme puts the thinnest possible layer of buyer equity on the type of property most likely to lose value, for the people most vulnerable to equity loss.
On a flat, that is not a ladder. It is a trapdoor with a nice kitchen.
Then comes the interest-free period, the policy equivalent of “no payments until next year” on a sofa. Under the original Help to Buy, it lasted five years and was followed by a fee that rose above inflation every year after that. Many borrowers found that repaying the loan required their home to be worth more than it was. Interest-free is not a feature. It is a date in the diary when the product changes.
A Pre-Christmas special re-run
If this feels familiar, it is because it is a repeat. Help to Buy ran from 2013 to 2023 and is remembered fondly by housebuilders’ shareholders.
When the National Audit Office looked at it in 2019, only 37% of buyers said they could not have bought any home without it. Everyone else could have bought something anyway; the scheme mostly helped them buy something bigger, sooner, or shinier. Economists at the LSE later found that in London, where it was most generous, it pushed prices up by about 6% and had no noticeable effect on how many homes were built. The subsidy went through the buyer and ended up in the land price.
Rayner has promised the new version will “build on the lessons learned from previous schemes.” Breakingviews has already called it a “subpar sequel.” Both could be true. Most sequels learn something from the original, and then do it again with a bigger budget, more CGI, but a less enthusiastic script writer.
Tuesday: Boxing Day
Twenty-four hours later, in Liverpool, the Housing Secretary took the conference stage and declared war on “fleecehold.”
It was, genuinely, a pretty good speech. Rayner promised to cap and then scrap ground rents, to cap “outrageous administration and permission fees,” and to end the “sickening threats of people’s homes being snatched.”
She read out a list of charges that would embarrass a budget airline: £250 for permission to keep a pet, £400 to change a door, £60 for a doorbell. The hall loved it. I loved it. Personally, I would add the fee for asking a management company what the fees are to the list.
Now let us go back to our Jess.
The Competition and Markets Authority found that four in five new homes sold by the biggest housebuilders come with estate management charges, set by management companies the homeowner did not choose and cannot easily sack. The government’s consultation on protecting those homeowners closed in March.
The protections do not exist yet.
So, on Monday, the government offered Jess a loan that only works on a new build. On Tuesday, it told her the new-build estate she was being offered was a national scandal.
It is like being handed a voucher for a restaurant and, the next day, hearing a health inspector describe its kitchen on the news.
Nobody in either speech seemed to notice these were broadly the same houses. One hand holds the estate gate open for a 2.5% deposit. The other waves a banner about how awful the estate is. It is rare to see a government be right twice in two days in a way that adds up to being wrong.
The rest of the stocking fillers
Rayner’s package did not stop at leasehold:
- Councils will be able to take control of homes left empty for six months rather than two years, using Empty Dwelling Management Orders, aimed at more than 300,000 long-term empty homes.
The number is real. The snag, according to reporting on the announcement, is that nobody has applied for one of these orders since 2021. The two-year wait was never what stopped councils. What stopped them was paying for the refurbishment, managing the tenants, and eventually handing the home back, with housing teams already buried in temporary accommodation.
Lowering the trigger on a power nobody uses is like cutting the speed limit on a road nobody drives down. It makes a headline, not traffic. It did, however, bring out a former Conservative minister on GB News calling it “a little bit like Communism,” which shows how much of this is policy and how much is theatre, on both sides.
- Then there is the 1.5 million homes target, which Rayner told the BBC this month she has a “slim chance” of hitting.
That explains a lot. Robert Colvile of the Centre for Policy Studies, who appears to like the scheme, said the “real point” is “to get housebuilding going again.”
Your First Home is not really a first-time buyer policy. It is a housebuilding policy, wearing a first-time buyer’s lanyard. That is a legitimate aim. It is just a different one, and when the two collide, Jess is the one losing 2.5% or more.
- There is also a promise to regulate property agents properly, which Lord Best’s working group recommended in 2019.
After seven years it is less a policy announcement than a delivery note, with rather insulting language for a very hard-working profession which she accepted a £20K payment from for a 45 minute turn on stage, only months prior at the PropertyMark One conference.
Nobody read the instructions
Put the week together and a pattern emerges, and it is not about left or right. Every measure deals with money or powers at the point of purchase: a loan to get you in, a cap on what you pay once you are in, a power to take over the empty house next door.
None of it deals with the thing that turned so many Help to Buy winners into casualties. In the sales office, the buyer was the person who knew least and understood nothing. This is not a position of power for the most important negotiation of our life.
The developer knew the build cost, the land price, and the release plan for each phase. Tyler knew the incentives and Jess knew the show flat smelled lovely.
The Housing Secretary understands this better than most. Rayner stepped down last year after underpaying stamp duty on a flat, having relied on advice that turned out to be wrong. I do not mention it to score a point. It is simply the best evidence available that even the person running housing policy could not get safely through a property purchase without someone explaining it properly.
If that is true for a Cabinet minister, it is certainly true for Jess, on a Saturday morning with a reservation deadline after a night shift on a hospital ward.
This is where NestLink sits, firmly on Jess’s side of the table. Before she hands Tyler a reservation fee, she should be able to find out in plain English what the legal and planning position of the plot is, what her tenure really commits her to, what the flood and future-risk picture looks like, and what kind of area she is buying into.
A KnowYourNest report does that for just £9.95, with every figure sourced, and the area and postcode data underneath is free.
It will not build a single home, but it might stop Jess buying the wrong house with public money, which, as gifts from the property industry go, would make a refreshing change.
What the budget could put under the tree
The details arrive at the Budget, so there is still time to make this scheme better rather than louder. Here are three suggestions for Mr Burnham, totally free of charge, which is more than the management company and his consultant team will offer.
- First, absolutely no equity loan on any home where the estate charge, how it can rise and who controls it, are not shown to the buyer at reservation in a standard format – like material information. If the taxpayer is lending a fifth of the price, the buyer can see the running costs.
- Second, make the developer contribution do something visible. Use it to pay for independent property information for every Your First Home buyer before they reserve, from outside the builder’s recommended panel, so the person taking the risk is not being briefed by the person taking the profit.
- Third, publish resale and remortgage outcomes every year, builder by builder. It took an NAO review to surface Help to Buy’s lessons. The next set should take a spreadsheet.
The housebuilders have had their Christmas, three-months early, and I hope they enjoyed it. Presents usually come with a gift receipt. This one comes with an estate charge and a management company. The Budget is the last chance to make sure Jess gets something other than the wrapping paper.’
