HBF backs Your First Home loan but says permissions have fallen to lowest level since 2012

The Home Builders Federation (HBF) has welcomed the Government's Your First Home equity loan scheme but urged ministers to bring it forward, as its own figures show planning permissions in England at their lowest quarterly level since 2012.

In its autumn 2026 parliamentary newsletter, HBF said the scheme would give eligible first-time buyers a government-backed equity loan worth up to 20% with deposits as low as 2.5%. It said a lack of effective demand had been one of the main barriers to increasing housing supply.

The federation said it was still waiting for full details of local authority house price caps and other scheme parameters before it could judge the likely effect on investment in new homes. It urged the Government to accelerate timescales where possible "to avoid the potential impact on the market in the intervening period".

The scheme

According to the Ministry of Housing, Communities and Local Government's Your First Home page, the scheme is for first-time buyers purchasing a new-build home in England. Buyers need a deposit of at least 2.5% of the purchase price and receive a government equity loan worth 20%, interest free for five years.

Households must have a total annual income of £110,000 or less outside London, or £140,000 or less within London, the Government said. There will be price caps for inner and outer London.

The Government expects the scheme to open for applications in February 2027, with customer pre-registration before the end of 2026.

The pipeline

HBF's Housing Pipeline release, based on Glenigan data, recorded 45,315 homes receiving planning permission in England in the second quarter of 2026, the lowest quarterly total since 2012. Permissions in the year to Q2 2026 totalled 214,515, the lowest annual figure since 2013.

HBF said the annual total was 58% of the 370,000 permissions a year that the National Planning Policy Framework identifies as needed to support the Government's target of 300,000 net additional homes a year. Only 1,234 projects of three or more homes were approved in the quarter, the lowest quarterly figure on record, according to the federation.

Neil Jefferson, chief executive at the Home Builders Federation, said: "These figures show a housing pipeline being squeezed to historically low levels."

HBF estimates the cost of delivering a new house has risen by an average of £76,000 since 2020.

Building Safety Levy

The newsletter also restated HBF's opposition to the Building Safety Levy, which it said came into force on 1 October to raise £3.4bn towards building safety remediation. HBF argued home builders had already committed about £6bn to remediation while overseas developers and product manufacturers had made no equivalent contribution. The Government ruled out an exemption for medium-sized developments, the newsletter said.

A survey by HBF and Quantum Development Finance found 91% of SME builders believed the levy would make developments financially unviable, 36% had already delayed, redesigned or cancelled schemes, and 69% said it would make them less likely to invest in new development. HBF said the levy accounted for £2,320 of the roughly £76,000 increase in the cost of building a typical new home over five years.

Richard Hemmings, managing director of Quantum Development Finance, said: "Government should pause, use the funding it already has, and properly assess the impact before pressing ahead."

Developer contributions and planning capacity

HBF said it supported a Ten Minute Rule Bill introduced by Labour MP James Naish that would require councils to spend developer contributions or reallocate them to a related purpose where the original projects cannot be delivered. HBF's research estimates £9bn of contributions is held unspent in England and Wales, up £800m since mid-2024, with about £3bn unspent for more than five years.

Its Planning on Empty report with Paragon Bank found 90% of local planning authorities operating below full staffing capacity, with councils employing fewer than 36 planning staff on average against about 44 needed. HBF estimated councils need 2,660 more planners, against a Government commitment to recruit 1,400 during this Parliament.

HBF's community investment release estimated the 209,000 homes delivered in England in 2024/25 generated more than £60bn of social and economic value, including more than £9bn for affordable housing and £1.3bn for infrastructure.

What happens next

HBF, Close Brothers Property Finance and VELUX will launch the annual State of Play report on SME home builders at a House of Commons reception sponsored by Baroness Thornhill on Tuesday 3 November 2026, between 18:30 and 21:00 in Terrace Dining Room A.