Burnham’s new Help to Buy lifts housebuilder shares before a single buyer moves in

Britain is putting the state back between young buyers and the front door. Prime Minister Andy Burnham has unveiled Your First Home, a revived Help to Buy that lets first-time buyers purchase a new-build home with a sliver of a deposit, topped up by a government equity loan covering a large slice of the price. The first people to profit were not buyers. They were the companies that build the houses.

The pitch to a generation priced out of ownership is simple: the government offers to do what the bank of mum and dad does for the lucky ones. Burnham framed the loan in exactly those terms, as help for young people with no family money to lean on. Whether it widens ownership or mostly props up new-build prices is the question the scheme’s fine print still has to answer.

The stock market answered first. Vistry shares rose 22%, Persimmon and Taylor Wimpey each gained 15%, Bellway added 14% and Barratt Redrow climbed 13%, City AM reported. Those are moves usually reserved for a takeover bid, spread across an entire sector in a single session. Anthony Codling, an analyst at RBC Capital Markets, called the scheme “the big catalyst the sector as a whole needed for a re-rating”.

The terms explain the rally. Buyers will put down as little as 2.5% and borrow up to 20% of the property’s value from the government, interest-free at first, with a conventional mortgage covering the rest. The loan applies only to newly built homes, so every pound of subsidised demand flows to a housebuilder’s sales office.

Builders have lobbied for this since the original Help to Buy, launched by then-chancellor George Osborne in 2013, closed in 2022. Since then, higher mortgage rates, weak consumer confidence and building costs pushed up by the war involving Iran have left sales sluggish. The government wants 1.5 million new homes by the next general election, roughly 300,000 a year, against the roughly 203,000 homes added in 2024-25, City AM noted. Robert Colvile, director of the Centre for Policy Studies think tank, argued that the real point of Help to Buy is to get housebuilding going again.

The original scheme is also the warning. Critics argued it lifted new-build prices and builder margins as much as it widened ownership, and Persimmon became the emblem when a bonus worth around £75 million for its then chief executive provoked a shareholder revolt in 2018. A subsidy for demand, applied to a constrained supply of homes, tends to leak into prices. Your First Home tries to limit that with local price caps and a household income cap, but neither level has been published, nor the length of the interest-free period or what the loan costs once it ends. A buyer entering with 2.5% of their own money and a fifth of the home owed to the state has almost no cushion if prices fall.

The scheme covers England only; Scotland, Wales and Northern Ireland set their own housing policy. Buyers of existing homes, the large majority of the market, gain nothing directly, and renters gain only if the extra building actually happens.

The Chancellor is due to set out the full terms, including the price and income caps and the cost to the Treasury, at the Budget in October, with pre-registration expected to open by the end of the year.

Until then, the only confirmed winners from Your First Home are the people who owned a housebuilder’s shares on Monday morning.

Tags: Andy Burnham, first-time buyers, Help to Buy, housebuilders, Persimmon, Vistry

Burnham’s new Help to Buy lifts housebuilder shares before a single buyer moves in

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