Heather Powell, a Partner at the firm, said: “Full details are yet to be announced but what we have been told is that the ‘Your First Home’ scheme will be open to first-time buyers in England who have a 2.5% deposit. It would provide them with an interest free loan worth 20% of the value of the newbuild they are trying to buy. The scheme could help stimulate new build sales, but if developers are required to contribute to the scheme, prices for first time buyers would have to rise to cover this additional cost, fuelling house price inflation.”

She added: “Developers are already struggling with viability as a result of higher construction and financing costs. To mitigate the cost of scheme contributions, the Government could get rid of the 4% Residential Property Developer Tax (RPDT.) This is levied on large house builders whose residential property development profits are greater than £25m and was introduced to fund the remediation works being funded by the Government to homes with unsafe cladding. However, these companies are addressing unsafe cladding issues on flats they have constructed, so they are being asked to fund works which they had no involvement in. Getting rid of RPDT would release capital for these developers to invest in building new homes.”

Heather said: “We are waiting for lots more information about this scheme. One key issue will be whether the scheme has a fixed end point when home owners need to repay the government loan. The previous ‘Help to Buy scheme’ had a fixed end point for loans which created an artificial market in newbuild starter homes which resulted in people selling very similar homes at the same time. Those who had to sell had to drop their asking price, which in extreme circumstances ate into the deposit they had saved up to buy the property.”