Your First Home could more than double new-build options for solo first-time buyers
New analysis from the UK’s largest property platform Rightmove, reveals that the proposed Your First Home scheme could more than double the number of currently available new-build homes affordable to an average solo first-time buyer in England.
Based on the scheme details announced so far, Rightmove’s analysis suggests that the number of new-build homes affordable to the average solo first-time buyer could increase by 114%, compared with buying using a standard 5% deposit and 95% mortgage.
The analysis assumes that a buyer can borrow 4.5 times the average annual salary and compares two routes:
Purchasing with a 5% deposit and a mortgage covering 95% of the property price
Purchasing under Your First Home with a 2.5% deposit, a 20% government-backed equity loan and a mortgage covering the remaining 77.5%
On this basis, the maximum property price affordable to an average single buyer could increase from £216,758 to £265,703, an increase of nearly £49,000. The required cash deposit would fall from £10,838 to £6,643.
The average salary workings are taken from the ONS’ weekly earnings by region data set.
Rightmove’s analysis is an early indication of the scheme’s potential impact, based on currently available new-build homes, salary averages and the elements of the scheme announced so far. Actual affordability and eligibility will depend on the final rules, individual buyers’ circumstances, lender affordability assessments and the developers participating in the scheme.
North West could offer solo buyers the greatest choice
At a regional level, Rightmove’s analysis suggests the North West would have the highest proportion of available new-build homes affordable under the proposed scheme.
Around 31% of the region’s available new-build homes could fall within the estimated purchasing power of an average solo first-time buyer, up from 20% currently with no scheme in place.
Yorkshire and the Humber could see one of the largest improvements in choice. The proportion of available new-build homes potentially affordable to an average solo buyer could rise from around 10% to 22%.
Region
% of new build homes affordable today to solo first-time buyers with a 5% deposit and 95% mortgage
% of new build homes potentially affordable under Your First Home to a solo first-time buyer
North West
20%
31%
Yorkshire & The Humber
10%
22%
North East
5%
14%
East Midlands
4%
13%
West Midlands
4%
10%
South East
4%
9%
East of England
3%
9%
South West
3%
7%
London
1%
5%
Kingston upon Hull could have the greatest number of affordable new-build homes
Rightmove’s local analysis highlights where the greatest overall number of affordable homes could be available.
The city of Kingston upon Hull would have the largest overall availability of affordable new-build homes under the new scheme, with three-quarters (75%) of new-build properties in the area affordable to a single first-time buyer earning the average wage for that region.
Liverpool follows with 72% of new build homes being accessible to a solo first-time buyer under the proposed Your First Home scheme, and Luton is third at 53%.
Local authority
Region
% of new build homes potentially affordable under Your First Home to a solo first-time buyer
Kingston upon Hull, City of
Yorkshire and The Humber
75%
Liverpool
North West
72%
Luton
East of England
53%
Blackpool
North West
51%
Hillingdon
London
45%
Manchester
North West
41%
Bexley
London
40%
Staffordshire Moorlands
West Midlands
39%
Boston
East Midlands
38%
Salford
North West
38%
Alex Slater, Rightmove’s Director of New Homes says: “Early analysis based on what we know about the Your First Home scheme so far suggests it could make a meaningful difference to the choice available to first-time buyers, particularly those purchasing on their own.
“The combination of a smaller deposit and a 20% equity loan could increase the maximum price an average solo buyer can afford by almost £50,000, while also reducing the amount they need to save upfront. This could bring thousands more currently available new-build homes within reach.
“The impact is likely to vary significantly between local markets. In some areas, the biggest benefit could be an increase from a very limited number of affordable homes today. In others, buyers could gain access to a much wider overall pool of properties.
“The final details announced at the Budget will be crucial, particularly any income and property price caps and regional variations. However, the early figures underline the potential for a well-targeted scheme to help more first-time buyers overcome both the deposit and borrowing barriers.”
