Autumn Budget: Boosting demand is only half the battle for housebuilders

Ahead of the Autumn Budget on 28 October, the government is expected to confirm further details of its proposed Your First Home scheme to support more people into home ownership.

The scheme would allow eligible first-time buyers in England to purchase a new build home with a 2.5% deposit and government-backed equity loan of 20%. Participating developers will also be expected to contribute towards the cost.

Carly Thorpe, Construction & Engineering Partner at law firm Walker Morris, said: “One of the biggest barriers to new residential development is that housebuilders are struggling to sell existing stock. The Your First Home scheme could help stimulate demand and give developers greater confidence to invest in new schemes.

“However, the Budget will need to address whether the scheme goes far enough. Its focus on first-time buyers means it will not directly support those looking to move into larger family homes, which are an equally important part of a functioning housing market and can help unlock movement throughout the wider property chain.”

She added: “Demand is also only one side of the equation. Housebuilders continue to face increased materials costs and labour shortages, which are placing additional pressure on the viability and delivery of projects. The government should therefore consider whether upfront funding or other targeted support is needed alongside buyer incentives. The detail of any developer contribution requirements will also be important, as additional costs could risk limiting the scheme’s effectiveness if they further impact project viability.”