Quick answer
Two government changes affect new-build developers this autumn. On 26 September the government announced Your First Home, an equity loan scheme in England that would let first-time buyers purchase a new-build home with a 2.5% deposit and a 20% government-backed equity loan, to be confirmed at the Budget. Only developers signed up to the scheme can sell through it. On 1 October 2026 the Building Safety Levy came into force, a charge per square metre on new residential schemes of ten or more homes in England, with a 50% reduction on mostly brownfield sites. Smaller schemes are exempt. Both affect the numbers behind a development, from the build budget to how quickly units sell.
Your First Home: what has been announced
The Ministry of Housing, Communities and Local Government's announcement on 26 September 2026 set out the outline:
- An equity loan scheme for first-time buyers in England, expected to allow a 2.5% deposit backed by a 20% government equity loan.
- New-build homes only, bought from a developer signed up to the scheme.
- An initial interest-free period on the equity loan.
- A household income cap and local property price caps, with details at the Budget.
- Developers expected to contribute towards the cost when they sign up.
The Chancellor will set out costs and timings at the Budget on 28 October. Our Autumn Budget preview covers what else to watch for.
Why it matters for your exit
Most development finance is repaid by selling the finished homes. Help to Buy showed how much an equity loan can support new-build sales, and a scheme aimed at first-time buyers could help homes in the right price bands sell faster, once it starts. Until the price caps and start date are known, it is safer to plan on today's market.
If homes are finished but not yet sold, a development exit loan can repay the build lender and give you time to sell at the right price. Our guide to development exit loans explains how they work. The National Custom and Self Build Association has also written to the government asking for custom build homes, and where possible self-builders, to be included in the scheme, as NaCSBA reported on 2 October. See our self-build finance page for building your own home.
The Building Safety Levy: what applies from 1 October
The levy raises money towards fixing historic building safety defects. According to the Federation of Master Builders' guide for small builders:
- It applies to building control applications for new residential schemes submitted from 1 October 2026, including conversions that create new homes.
- Schemes of fewer than ten new homes are exempt, as is purpose-built student accommodation with fewer than 30 bedspaces.
- It is charged per square metre, at rates set for each local authority area.
- Sites where at least 75% of the land is previously developed get a 50% reduction.
- Splitting a scheme into phases may not avoid it, because the whole planning permission is assessed.
- It must be paid before the earlier of occupation or completion.
Research by the Home Builders Federation in August found 91% of the SME housebuilders it surveyed believe the levy will make developments unviable.
What to do now
- Add the levy to the appraisal for schemes of ten or more homes. Lenders will expect to see it in the costs. See writing a development appraisal.
- Check the land price. A new cost per square metre reduces what a site is worth. Our guide to residual land value shows how.
- Allow for planning time. On 12 October, NaCSBA reported research by the Home Builders Federation and Paragon Bank finding councils received an average of almost £600,000 each in planning performance agreement fees between 2022 and 2025, while delays persist.
- Match the finance to the scheme. Residential development finance and ground-up development finance fund the build. If you are buying the site first, see land finance.
Lenders on our panel, including Paragon, fund residential schemes of different sizes. Check your figures with our calculators, then use Instant Quotes to see which lenders on our panel fit.
Common questions
What is the Your First Home scheme?
A planned equity loan scheme in England for first-time buyers of new-build homes, expected to allow a 2.5% deposit with a 20% government equity loan. Details are due at the Budget on 28 October.
When did the Building Safety Levy start?
It came into force in England on 1 October 2026, for building control applications on new residential schemes submitted from that date.
Does the Building Safety Levy apply to small developments?
No. Schemes of fewer than ten new homes are exempt. Larger schemes pay a charge per square metre, with a 50% reduction on mostly brownfield sites.
Can development finance cover the Building Safety Levy?
It is a cost of the scheme like any other, so it belongs in the appraisal. Whether a lender funds it depends on its terms and how much of the total cost it lends.
This article reports news and published figures as at 15 October 2026. It is for general information only and is not legal, tax or financial advice. Bridge & Build Finance is a commercial finance brokerage service, not a lender. Finance is subject to status, lender criteria, valuation, underwriting and approval.
