The UK government's Your First Home scheme targets a specific slice of the housing crisis: first-time buyers with steady incomes but no family wealth to draw on. The mechanism is a 20% government-backed equity loan on new-build properties, paired with a minimum deposit of just 2.5%, leaving the buyer needing only a 77.5% standard mortgage. The equity loan starts interest-free, which the government says could save participants hundreds of pounds per month compared to a typical 95% loan-to-value mortgage. The scheme applies to England only and is restricted to new-build flats and houses. Full details are expected at the budget on 28 October. What's been announced so far is skeletal — no price caps, no regional adjustments, no timeline for when interest kicks in on the equity loan, and no clarity on repayment terms. The structural question is familiar from Help to Buy, the scheme's spiritual predecessor: does a demand-side subsidy actually help buyers, or does it inflate new-build prices by exactly the amount of the subsidy? Help to Buy ran from 2013 to 2023 and was widely criticised for enriching housebuilders — Persimmon, Barratt, Taylor Wimpey — who captured the subsidy through higher prices. The National Audit Office found that 37% of Help to Buy users could have purchased without the scheme. The new-build restriction is the tell: it channels public money directly through the developer pipeline. For a buyer, the immediate maths are attractive. On a £250,000 new-build, the deposit drops from £12,500 (at 5%) to £6,250 (at 2.5%), and the mortgage shrinks from £237,500 to £193,750. Monthly payments fall meaningfully. But the buyer now has a 20% equity stake owed to the government — a deferred cost that crystallises on sale or remortgage, and which rises with property values. The generativity question is whether this scheme genuinely expands access to homeownership or merely front-loads demand into the new-build sector, concentrating benefits among volume housebuilders with the land banks and planning permissions to supply eligible properties. If developers price in the equity loan — as they demonstrably did under Help to Buy — the net transfer flows from taxpayer to shareholder, not from government to first-time buyer. Resilience is weak by design. The scheme is England-only, new-build-only, and creates a new class of government-encumbered homeowner whose equity position depends on property prices rising. If prices stall or fall, buyers carry a 20% equity loan on a depreciating asset while the government's exposure balloons. There is no counter-cyclical mechanism. The 28 October budget announcement will determine whether YFH learns from Help to Buy's failures or repeats them. Price caps, regional targeting, developer profit constraints, and transparent equity-loan terms would signal a scheme designed for buyers. Their absence would signal one designed for builders.
