First-time buyers ‘will be locked out by price caps’

By the Editorial Team · Friday, October 9, 2026

The UK government's upcoming "Your First Home" scheme, offering first-time buyers a 20 percent government loan for new-build properties, may be limited by proposed local property price caps that do not fully account for variations in housing costs within regions. Experts warn that these caps could restrict access to suitable homes for many buyers, especially those seeking larger family houses, and suggest that adjusting cap levels could significantly increase the scheme’s effectiveness.

The UK government’s forthcoming "Your First Home" scheme, designed to aid first-time buyers with a government-backed loan of 20 percent toward new-build properties, may face challenges due to proposed local property price caps, according to recent analysis. The scheme, announced at the Labour Party conference, requires buyers to have a minimum mortgage deposit of 2.5 percent and is intended to address affordability issues by reviving elements of the previous Help to Buy initiative.

Help to Buy, which ran from 2013 until 2021, offered government loans of 20 percent outside London and up to 40 percent within London. Initially, the scheme imposed a flat maximum property price cap of £600,000 across England, but in its final two years, regional caps were introduced ranging from £186,100 to £600,000 based on 1.5 times the average first-time buyer price in each region.

Experts at property consultancy Savills have raised concerns that the local price caps planned for Your First Home could inadvertently exclude many first-time buyers, particularly due to variation in property prices within regions. While regional average caps are intended to reflect market conditions, the reality of significant price differences at smaller geographic scales—such as individual towns or districts—means these caps may not accommodate all local markets.

For example, Savills notes that in the east of England region, a three-bedroom new-build home of at least 900 square feet in Epping Forest averages around £650,000, substantially above the previous Help to Buy cap of £407,400 for the entire region. Conversely, a similar property in Ipswich is priced closer to £362,450, comfortably under the cap. Similarly, in the south, Bournemouth’s three-bedroom new-build homes average £465,000, exceeding the regional cap of £349,000, whereas other areas such as the Forest of Dean in Gloucestershire maintain lower average prices near £335,000.

Savills also highlights changing buyer behavior, suggesting many first-time purchasers now prefer larger family homes with three bedrooms, rather than the smaller two-bedroom flats that previously dominated the market for first buyers. This trend, combined with the hyperlocal price variations, suggests the proposed caps may not fully reflect current market realities.

Furthermore, the consultancy’s analysis suggests that even modest adjustments to cap levels could significantly expand the availability of eligible properties. For instance, a hypothetical England-wide cap set at £300,000 would limit three-bedroom home purchases under the scheme to 10 percent of local authorities, while raising the cap to £350,000 would increase that availability to 58 percent.

The government plans to announce the final local price caps in the upcoming budget, and the analysis underscores the delicate balance policymakers must strike to ensure the scheme effectively supports first-time buyers without unintentionally excluding those in higher-cost areas.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.