The UK government's Your First Home scheme, announced by Andy Burnham, offers first-time buyers a 20% government-backed equity loan on new-build properties with just a 2.5% deposit. The scheme applies to England only, targets buyers who cannot rely on family wealth, and will include household income caps, deposit caps, and regional property price caps — none of which have been disclosed yet. Registration opens by end of 2026, with further details expected in the 28 October budget. The market's instant verdict was unambiguous. Persimmon jumped 15%, Barratt Redrow and Taylor Wimpey 12%, Vistry 10%, and Crest Nicholson 8.5% on the announcement. No buyer has been helped yet, no home has been built, and the cap structure that determines whether ordinary people actually benefit remains entirely undefined. Housebuilder shareholders moved first because they have seen this playbook before. Your First Home is structurally a rebrand of Help to Buy, which ran for a decade and ended in March 2023. That scheme offered 5-20% equity loans (up to 40% in London) with a 5% minimum deposit. YFH halves the deposit to 2.5% but appears less generous in London, where the old 40% equity loan option is absent. Help to Buy's equity loan was interest-free for five years, then rose annually by CPI plus 2%. The new scheme's interest terms are unknown — and this is the single most important design parameter for buyers. Help to Buy was credited with assisting 328,000 first-time buyers and a government review found it delivered "very high value for money." It was simultaneously accused of inflating property prices and fattening housebuilder margins. Both things were true: the scheme subsidized demand without proportionally expanding supply, channeling public money through buyers into developer balance sheets. Developers will be expected to make a "contribution" to YFH, though the size and enforcement of this contribution are unspecified. The restriction to new-build properties is the mechanism that guarantees developer capture. Buyers cannot use the scheme for existing housing stock, meaning every pound of government-backed lending flows exclusively through the housebuilding industry. At an average first-time buyer asking price of £225,199, the scheme would provide a £45,040 equity loan, requiring only a £5,630 deposit and a mortgage of £174,529 at a favorable 77.5% loan-to-value ratio. The unknowns are load-bearing. Income caps determine whether this reaches genuinely stretched households or subsidizes the merely uncomfortable. Property price caps determine whether the scheme operates in markets where homes are actually affordable or acts as a floor beneath prices in expensive regions. Interest terms on the equity loan determine whether buyers get a genuine hand up or a deferred cost that compounds over decades — the same structural complaint that now haunts the student loan system. The fundamental tension is unchanged from Help to Buy: demand-side subsidies into a supply-constrained market tend to capitalize into prices, enriching landowners and developers while leaving affordability structurally unchanged. If YFH does not pair equity loans with binding supply targets or land-value capture mechanisms, the 20-year outcome is predictable — higher nominal prices, larger government loan books, and first-time buyers carrying equity loan debt alongside mortgages. The housebuilders' share prices are telling you exactly what the smart money expects.
