Your First Home: what the new price caps mean for Kent

On 3 November the Government published the local price caps for Your First Home, its new equity loan scheme for first-time buyers of new-build homes. The headline change from Help to Buy is that caps are now set by local authority, based on local median prices, rather than by region.

 

For Kent that matters. Help to Buy applied a single South East cap of £437,600. The new Kent caps run from £340,000 in Folkestone & Hythe to £465,000 in Sevenoaks, and only Sevenoaks and Tunbridge Wells now sit above the old limit. Read against current new-build values, the caps point to quite different outcomes across the county, for both housebuilders and landowners.

 

The scheme in brief

• Buyers: first-time buyers with household income of £110,000 or less (outside London), buying a new-build home as their main residence.
• Funding: a minimum 2.5% deposit, plus a Government equity loan of 20% of the price. The loan is interest-free for five years, then 1.5% in year six and 3% from year seven.
• Developers: must sign a participation agreement and pay a fee on each sale through the scheme. The fee is 1% on the first 100 homes a year, 3% on homes 101 to 250, and 4% above 250.
• Timing: developer registration opens by the end of December 2026, buyer applications in February 2027, and first sales in April 2027. Funding is £4.7bn over five years.

 

The participation fee is new. Help to Buy carried no equivalent charge, so it is a cost housebuilders will need to build into appraisals and, in time, land bids.

 

Caps against new-build values

The Kent Property Market Report 2025-26 sets out achieved new-build values per square foot for each Kent district. Dividing each cap by those values gives a rough guide to the largest home that can be sold within the scheme.

 

District	Your First Home cap	New-build value (£/sq ft, Sept 2025)	Largest home under the cap (sq ft)
Sevenoaks	£465,000	£565–830	c.560–820
Tunbridge Wells	£445,000	£480–800	c.555–925
Tonbridge & Malling	£435,000	£420–655	c.665–1,035
Ashford	£435,000	£332–450	c.965–1,310
Gravesham	£420,000	£400–560	c.750–1,050
Medway	£420,000	£335–490	c.855–1,255
Maidstone	£415,000	£330–575	c.720–1,260
Swale	£410,000	£315–460	c.890–1,300
Canterbury	£405,000	£380–620	c.655–1,065
Dartford	£365,000	£400–580	c.630–915
Dover	£350,000	£305–415	c.845–1,150
Thanet	£350,000	£330–555	c.630–1,060
Folkestone & Hythe	£340,000	£355–750	c.455–960

 

For reference, the nationally described space standard minimums are around 750 sq ft for a 2-bed flat, 850 sq ft for a 2-bed house, 900 sq ft for a compact 3-bed house and 1,000 sq ft for a typical 3-bed house.

 

Three Kent markets

At mid-range values, the districts fall into three broad groups.

 

Family housing fits: Medway, Swale, Ashford and Dover. A standard 3-bed house sits comfortably within the cap, and a compact 4-bed of around 1,050 sq ft is borderline. These are the districts where the scheme is likely to have the greatest effect on sales rates for mainstream family housing.

 

The squeeze zone: Maidstone, Gravesham, Canterbury, Thanet, Tonbridge & Malling and Folkestone & Hythe. 2-bed houses fit. 3-beds only fit where they are compact, at around 900 sq ft, or in the lower-value parts of the district. The value ranges here are wide, so the effect will vary considerably from scheme to scheme.

 

Mostly flats: Sevenoaks, Tunbridge Wells and Dartford. At current new-build values, even a 2-bed house generally exceeds the cap. The scheme will mainly support 1- and 2-bed apartments, and will do little for house-led schemes in these districts.

 

What it could mean for unit mix and planning

We expect housebuilders to respond in several ways.

 

• Pricing to the cap. Expect homes priced just below each district's cap, with specification adjusted to protect margin rather than prices reduced.
• Smaller house types. The cap rewards homes that are slightly smaller but achieve higher values per square foot. Expect more compact 3-bed and 4-bed house types, with designs moving closer to space standard minimums where councils have adopted them.
• More 2-bed houses and apartments in the squeeze zone and West Kent, where family housing largely falls outside the scheme.

 

This may create tension with local plan mix policies, many of which seek a higher proportion of 3- and 4-bed family homes. Housebuilders can argue that faster sales mean faster delivery, which helps councils struggling to show a five-year housing land supply.

 

What it could mean for landowners

The scheme should support demand, and so land values, but unevenly across Kent.

 

In Medway, Swale, Ashford and Dover, sites suited to mainstream 3-bed housing may see firmer interest, as housebuilders factor in faster sales. In the squeeze zone, the effect will depend on where a site sits in the local value range and whether the scheme can be designed around compact house types. In Sevenoaks and Tunbridge Wells, the scheme is unlikely to lift values for house-led sites, and flatted schemes may gain a relative advantage.

 

Landowners in option or promotion agreements should expect the scheme to feature in housebuilders' appraisals, including the participation fee. Where an outline application or reserved matters submission is still to be made, it is worth considering whether the proposed mix positions the site well for the scheme.

 

Timing

With first sales due in April 2027, there are around five months to secure any amendments, plan phasing and decide which plots will be offered through the scheme. Section 73 applications can take several months to determine, so the window is short for anyone wanting changes in place for launch.

 

A note of caution

The values in the market report date from September 2025 and are wide ranges, so local new-build comparables will always give a better answer for a specific site. Eligibility will also depend on a valuer supporting a price at or below the cap. The detailed rules on incentives, extras and valuation are yet to be published.

 

How DHA can help

DHA advises landowners and housebuilders across Kent on planning strategy, unit mix and land transactions. If you would like to review how Your First Home could affect a site or consented scheme, please get in touch.

 

Sources

• Your First Home – GOV.UK

• Kent Property Market Report 2025-26

• Your First Home price caps revealed – Mortgage Solutions

• Price caps across England – LBC

 

Editor's note (remove before publishing): caps taken from press listings of the official table. Check them against the GOV.UK list before publishing.