Delays in launching the government’s Your First Home scheme could cause first-time buyers to put purchases on hold and distort the housing market, an independent housing committee chaired by Sir Vince Cable has warned.
The Housing Policy and Delivery Oversight Committee has backed the new scheme but called on the government to ensure its application process is operational as quickly as possible.
Further details of Your First Home are expected in the Budget on 28 October, including possible property price caps and the level of contributions required from housebuilders.
However, the committee warned that buyers could defer transactions while waiting for the scheme to become available, potentially slowing activity in the first-time buyer market.
DIGITAL SYSTEM WARNING
It noted that the previous Help to Buy scheme operated using an analogue system, while Your First Home is expected to require a new digital platform which has yet to be built.
The committee also called for smaller housebuilders to face a lower contribution towards the scheme than larger developers.
Cable (main picture, inset), who chairs the committee, said: “The ‘Your First Home’ initiative can be a stimulus to the market and encourage builders to accelerate developments. They need certainty and simplicity, and we hope the Budget will fill in some missing details.
“Most importantly we are concerned to see an application process that is in place as soon as possible so that potential market distortion through purchases being deferred is avoided.”
The former business secretary also revealed that he had changed his position on government-backed homeownership schemes.
He added: “I used to be opposed to Help to Buy policies, but I believe the new proposals will stimulate new building without creating inflation.”
OBR ROLE
The committee separately called for every measure announced in future Budgets to be assessed for its impact on housing.
It suggested the Office for Budget Responsibility could be given responsibility for examining whether fiscal measures risk damaging housing supply, transactions or affordability.
Cable said: “Housing can be a tremendous engine for growth in the economy, and we support all efforts to improve quality and delivery.
“In fact, it is integral to so many aspects of the economy that we believe it would be helpful for any budgetary measure to be assessed for impact on the market. The OBR is a natural place for that to happen.”
STAMP DUTY SHAKE-UP
The committee also renewed calls for Stamp Duty Land Tax reform, with its preferred option a return to the £500,000 threshold used during the Covid-era stamp duty holiday.
An alternative would be to exempt first-time buyers and downsizers, although the committee acknowledged that this would be more complicated to administer.
It also backed removing VAT from home extensions and refurbishment projects.
The committee argued that changes to transaction taxes could help unlock existing housing stock at a time when the government is falling behind its housebuilding ambitions.
Research prepared for the committee by planning expert Kelvin MacDonald estimated that 437,900 net additional homes had been delivered in England between the start of the current Parliament and 20 September 2026.
Extrapolating the current rate of delivery across a five-year Parliament would result in just under one million additional homes – around a third below the government’s 1.5 million target.
