Autumn Budget 2026: Are housebuilder shares in line for a lift with Help to Buy revival?

The coalition government’s Help to Buy scheme for first-time buyers represented “very high value for money”, according to a government review that boosted the argument to rekindle a similar iteration of a programme that delivered a significant boost to housebuilder shares during its lifetime.

Help to Buy, which then-Chancellor George Osborne launched in 2013, provided £25bn of social value to the UK in the last financial year, despite facing criticism that it merely inflated house prices and the shares of UK housebuilders. Help to Buy was often dubbed 'Help to Build', such was the degree to which it incentivised first-time buyers to look at new-build properties. Both versions of the scheme applied to homes worth up to £600,000, and by 2014-15 supported about a fifth of first-time buyer purchases.

The findings of the audit support the views of some in the government, including the housing minister Matthew Pennycook, who are pushing for Labour to introduce its own version to improve homeownership rates among younger voters. It’s believed they were overruled by former Chancellor Rachel Reeves, who preferred to focus more on boosting housing supply. 

The pressing need comes not from housebuilders but the government, which is falling short of its target to build new homes. Around 200k were built in the year to June, short of the roughly 300k required for the government to hit its goal of 1.5mn new homes by 2029. Meanwhile with mortgage rates above 5% and the labour market softening house prices are stagnating, acting as a disincentive to housebuilders to built more homes.

With the Budget on its way, it’s unclear whether current Chancellor John Healey is minded to introduce such a programme, but the pressure to build more homes is ever-present. The argument is that incentivising demand incentivises the housebuilders to more confidently raise supply.

Relief for housebuilders?

A new Help to Buy scheme would deliver a boost to housebuilders after a difficult period for the industry. The outlook has darkened since the onset of the US-Iran war as macroeconomic headwinds are meeting inflationary pressure. At the start of the year the Bank of England’s policy rate was seen on downwards trajectory, while markets have now shifted to pricing in as many as four rate hikes. Mortgage rates have hit their highest in three years, curtailing demand for new homes and stifling sales.

For instance, earlier this month Crest Nicholson warned of a surprise loss as it complained of a “subdued” property market. In an unscheduled trading update, the firm said it expects to complete fewer homes than expected in the year to 31 October. Shares are down 60% YTD.

Taylor Wimpey shares traded as high as 116p in February before the onset of the conflict in the Middle East and last traded around 80p, with the company warning in 31 July half-year results that the market remains “challenging”. 

Faced with such a tough market, housebuilders are offering discounts. Vistry, formerly Bovis Homes, has cut prices to shift unwanted houses. And far from building more homes, Vistry is restricting work, with management saying they are reducing levels of work in progress by tightly controlling site starts. The firm says it “would welcome some demand-side stimulus”.

Barratt Redrow, Britain's biggest housebuilder, has also trimmed its output forecast for the year. Having planed to build between 17,700 and 18,200 homes in the current financial year but has already cut this to somewhere between 17.500 and 17,900.

Whilst the industry is feeling the pressure from rising mortgage rates and higher input cost inflation, arguably the problems reach further back.  Taylor Wimpey shares regularly traded around 200p in the period from 2015 to 2021, peak years for Help to Buy. Shares in Persimmon are down around 60% in the last 5 years and have never recovered to levels achieved during the peak of the Help to Buy scheme. Clearly anything to raise demand in the current environment would help.

Is a new Help to Buy scheme likely under Labour?

The answer is not so clear-cut. While the official audit praises the scheme for delivering social value, Andy Burnham has sought to prioritise the supply side by building new social and affordable homes, as opposed to juicing the demand side. The government has earmarked £39bn for building social, affordable and council homes. Whilst some of this is channelled to private builders like Vistry, it's not a powerful lever for listed housebuilder shares.

Nevertheless, it's believed that Healey and Burnham are working up some kind of support to grease the wheels of the housing market. It's believed that Labour ministers were drawing up plans before Keir Starmer left in July, but whether these have progressed is uncertain. A £39bn bill for council houses is a hefty price tag when the fiscal outlook is so fragile and Chancellor's headroom so slight. A solution that incentivises private demand and supply would come at a lower cost to the Exchequer, which may appeal to the Treasury.

Other options on the table include a targeted equity loan scheme like Labour’s HomeBuy Direct, a forerunner to Help to Buy launched in 2008. The government is already considering a new first-time buyer ISA with no upper age limit, while another option is to build homes reserved for first-time buyers, offered at below-market prices.

Planning, costs and taxes

The industry would like more done about planning reform, but the real focus is on cost. The Home Builders Federation says the "huge increases in taxes and regulatory costs" layered on to development over recent years have made many potential home building sites unviable for development. HBF estimates that the cost of delivering a new house has increased on average by £76k since 2020. 

It means that even if there are further efforts to ease planning restrictions, builders lack the incentive to act.

Whilst some form of scheme to increase demand would be a boost, it seems it will need to come alongside a lower in the tax and regulatory burden on homebuilders to translate into something material. HBF notes that many sites are just not financially viable due to costs because of additional taxes like the building safety levy and landfill tax.

Other potential changes to property taxation might affect housebuilders. Andy Burnham has ruled out changing or scrapping stamp duty in the Budget, and he rejected the idea of replacing stamp duty and council tax with a single annual property tax, saying: “It’s just not the case that we are bringing forward plans on that scale at this moment in time". While changes may be in store further down the road don't expect any overhaul to stamp duty and council tax in this Budget. Housebuilders would be keen to see a stamp duty holiday or change in thresholds for first time buyers, but it seems this is unlikely at this stage. 

Cui bono?