HBF welcomes £4.7bn Your First Home equity loans as OBR cuts housing supply forecast

The Home Builders Federation (HBF) has welcomed the Chancellor's confirmation of the Your First Home equity loan scheme at the Autumn Budget 2026, while flagging an Office for Budget Responsibility forecast that cuts expected housing supply.

HBF said the Chancellor, John Healey, confirmed £4.7bn of funding over five years for equity loans to help first-time buyers purchase qualifying new-build homes. The trade body said the scheme answered the industry's calls for targeted demand-side support for buyers.

Neil Jefferson, Chief Executive of the Home Builders Federation, said: "A lack of effective demand has been one of the major barriers to increasing housing supply, and addressing it would lead to more much-needed homes, jobs and investment."

HBF said it was awaiting full details on house price caps and the other scheme parameters before judging the likely effect on investment in new homes and future delivery.

The scheme

According to the Ministry of Housing, Communities and Local Government (MHCLG), buyers under Your First Home will need a deposit of at least 2.5% and will receive a government equity loan worth 20% of the purchase price, interest free for five years.

Eligibility is limited to households with a total annual income of £110,000 or less outside London, or £140,000 or less within London, MHCLG said. Buyers must purchase a new-build home in England within the relevant local price cap.

MHCLG said a full list of price caps by local authority area would be published shortly, with full eligibility rules to follow before applications open. The scheme is expected to open for applications in February 2027, with pre-registration before the end of 2026.

The Government first said on 26 September 2026 that the scheme would be confirmed at the Budget, describing it then as expected to support 2.5% deposits backed by 20% equity loans.

The OBR forecast

HBF said the OBR's economic and fiscal outlook expects net additions to the housing stock to fall to around 230,000 in 2025/26. Compared with its March forecast, the OBR expects 190,000 fewer cumulative net additions over the period to 2030/31, HBF said.

HBF also said the OBR expects the Your First Home equity loan scheme to have only a marginal impact on housing supply given its limited overall size.

According to HBF, the OBR's outlook says the cumulative burden of regulation and policy costs appears to have weighed on housebuilding activity to a greater extent than it had previously assumed. HBF linked that finding to its own Viability Crunch report, published on 6 May 2026.

That report said new taxes, levies and inflation could add £76,000 to the cost of building a home compared with five years ago, and that only around 208,000 new homes were completed in 2024/25, a 16% decline from 2020. It called for a moratorium on further new policy costs, taxes and levies on home building, and noted the Building Safety Levy was set to come into force in October 2026 and apply to all new homes.

Other Budget measures

HBF said the Budget also included the Government's response to the consultation on the VAT treatment of land for social housing, known as Golden Brick, and a new First-Time Buyer ISA.

The Government confirmed that brownfield sites of up to 1.5 hectares will be exempt from Biodiversity Net Gain (BNG) requirements, HBF said.

Jefferson said: "We welcome any moves to reduce the considerable regulatory and policy cost burden on house building, albeit this move will have a limited impact and benefit a relatively small number of urban sites."

In an earlier survey of its members, HBF reported that 60% of respondents said BNG had influenced their company's decision not to pursue sites, and that the previously proposed exemption of 0.2 hectares was widely seen as too low.

Separately, the Budget document published by HM Treasury provides an additional £1.5bn to deliver around 10,000 social and affordable homes in England.

MHCLG said the list of local price caps for Your First Home would be published shortly, ahead of applications opening in February 2027.