Your First Home scheme could lift Bellway output by 10%
Bellway's chief executive says the government's new first-time buyer initiative could boost annual house production by 10% once it launches.
Key Takeaways
- Your First Home scheme could increase Bellway's annual output to 10,000 homes, up from current 9,000-9,400 target
- Government equity loan of 20% and 2.5% minimum deposit designed to help first-time buyers on modest incomes
- Near-term market slowdown expected as buyers wait for full scheme details and October 28 launch date
Bellway, one of Britain’s largest housebuilders, believes the government’s new Your First Home scheme could boost its annual output by roughly 10% once the initiative launches, according to The Guardian. The scheme, announced by Andy Burnham two weeks earlier, was designed to help first-time buyers purchase new-build properties with government backing.
The Your First Home scheme provides an equity loan covering 20% of the purchase price and cuts the minimum deposit required to just 2.5%. Income caps and price limits ensure the initiative targets first-time buyers with modest incomes buying affordable homes. Full details, including the official launch date, are expected on 28 October when John Healey delivers his first budget as chancellor.
Jason Honeyman, Bellway’s chief executive since 2017, said the scheme “has the potential to provide significant support for first-time buyers” and could drive the builder’s completions back to around 10,000 homes annually within the 12-month period from September next year at the earliest. He cited the company’s past experience with previous help-to-buy programmes to estimate the 10% uplift.
| Bellway output boost | Your First Home scheme could increase annual output by approximately 10% |
|---|---|
| Target completions | Bellway targeting 9,000–9,400 homes this year, potentially rising to 10,000 annually |
| Scheme mechanics | 20% equity loan, 2.5% minimum deposit, income and price caps for England new-build only |
| Forward order book | 4,981 homes worth £1.4bn, down from 5,285 homes worth £1.5bn a year ago |
| Recent revenue | Bellway revenue £3.16bn, up 13%; underlying profit before tax £305.7m, up 5.7% |
| Average selling price | Expected flat at approximately £325,000 over the coming year |
Why Bellway sees growth but the market may stall
Honeyman acknowledged a paradox: while the scheme promises longer-term benefits, it could dampen the market in the short term as prospective buyers defer purchases and wait for the initiative to launch and mature. This waiting effect could slow sales momentum in the coming weeks.
Bellway is currently targeting between 9,000 and 9,400 homes in the financial year to August 2025, down from 9,695 last year. The drop reflects a lower forward order book and what the company describes as “ongoing pressures on customer demand” alongside construction cost inflation running at 3% to 4% annually.
The builder’s forward order book contracted to 4,981 homes valued at £1.4bn, compared with 5,285 homes worth £1.5bn twelve months earlier. Average selling prices are expected to remain flat at roughly £325,000 over the next year, offering limited pricing relief against rising build costs.
Why this scheme affects some builders much more than others
Not every major housebuilder will benefit equally from the Your First Home scheme. The programme applies exclusively to England and covers only new-build properties, meaning it targets the mainstream housebuilding market where Bellway, Persimmon, Taylor Wimpey and MJ Gleeson operate.
Our read is that the real beneficiaries will be builders focused on the starter-home segment and new-build developments. Berkeley Group, which concentrates on premium London properties where prices exceed the scheme’s caps, stands to gain little. Similarly, Vistry Group, which has deliberately shifted towards affordable and social housing, may not see material benefit because those properties typically sit outside the scheme’s remit.
Why did housebuilder shares jump on the announcement?
When Andy Burnham announced the Your First Home scheme a fortnight ago, housebuilder shares rose by more than 10% because the market recognised the scheme as demand stimulus. First-time buyers have been priced out of the market for years, and a government-backed equity loan plus low deposit requirement directly addresses that barrier. More buyers means more homes sold, which translates to higher revenue and output for the builders holding land and planning permissions ready to build.
Bellway’s own share price rose 2% on the day Honeyman made his comments, though the stock remains down more than 25% for the calendar year to date, reflecting broader sector weakness and persistent uncertainty over construction costs and consumer confidence.
What the scheme means for your home purchase and investment angle
If you are a first-time buyer on a modest income in England, the Your First Home scheme could materially lower the barrier to purchase. The combination of a 20% government loan and a 2.5% deposit requirement means you need to save far less cash upfront than traditional routes demand. However, you will need to wait until late October for scheme rules to be formalised, and the property must be a new-build flat or house.
If you own housebuilder shares or are considering them, Honeyman’s forecast suggests Bellway and its peers targeting the starter-home market could see meaningful volume and earnings growth once the scheme fully embeds, which he estimates could take until late 2026 or beyond. The short-term risk remains demand uncertainty and the waiting effect his own comments flagged. Construction cost inflation of 3% to 4% per year is also a headwind that no scheme can offset directly.
For deeper analysis of housebuilder valuations, the housing shortage and how government schemes affect new-build pricing, read Thewealthora’s guide to the UK property sector.
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Originally reported by The Guardian. Facts verified; analysis and wording are Thewealthora’s own.
Ethan Caldwell
Executive Editor, Markets
Ethan Caldwell is Executive Editor of Thewealthora's Finance Wire, the desk that carries this site's fast coverage of US equities, corporate earnings, central bank decisions and the macro calendar.
