Government plans to offer first-time buyers deposits as low as 2.5% risk prioritising developers and housebuilding targets over buyers’ needs, a property firm has warned.
The proposed Your First Home scheme is expected to provide eligible first-time buyers with a 20% equity loan towards a new-build property bought from a participating developer.
It is intended to support homeownership and stimulate housing supply, with developers expected to contribute towards the cost. Full details are due to be confirmed at the Budget.
However, Elliot Castle (main picture, inset), Chief Executive Officer of We Buy Any Home, argues that excluding existing properties would limit buyers’ choice and potentially distort the wider housing market.
NEW-BUILD RESTRICTION QUESTIONED
The Government has pledged to deliver 1.5 million homes in England during this Parliament, but its latest figures estimate 196,900 net additions in 2025-26 — below the annual average needed to meet that target.
In a video on Instagram Castle says: “The Government is under enormous pressure to deliver its housing pledge, and developers need buyers to give them confidence to keep building.
“This scheme helps both. But if the priority were simply helping first-time buyers overcome the deposit barrier, why exclude someone buying an existing home?
“A buyer’s need for help does not disappear because the property they want has already been lived in. The clearest winners from that restriction are participating developers and a Government trying to catch up with its target.”
WARNING OVER PROPERTY CHAINS
Castle warns that directing supported buyers towards new developments could reduce demand for existing starter homes, leaving sellers facing longer waits or pressure to accept lower offers.
“An owner selling a small flat or terrace may need that first-time buyer to make their own move,” he says. “Supporting one part of the market while overlooking another risks leaving those chains stuck.”
The scheme’s deposit requirement, equity loan, household income limits, regional property price caps and implementation timetable are expected to be confirmed at the Budget. It is not yet open for applications.
Castle adds: “Building more homes matters, and this could genuinely help some buyers. But ministers should not confuse boosting developers’ sales with fixing the problems facing the whole housing market. First-time buyers deserve choice, not support that depends on buying the Government’s preferred type of home.”
Watch the Instagram video HERE.
