Budget 2026 for developers: BNG, Your First Home, building regulations and the OBR outlook
Housing on small brownfield sites in England will be exempt from biodiversity net gain. Building regulations will not change much for the rest of this Parliament. A £4.7 billion scheme lends first-time buyers 20% of a new-build's price. But the OBR expects house prices to rise more slowly than inflation.
Published , the day of the Budget. Every Budget figure links to the official document it comes from. General information, not tax or financial advice.
Budget 2026 guides: All 21 points · Tax · Building and buying · Landlords
Which sites no longer need biodiversity net gain?
Housing on brownfield sites of up to 1.5 hectares in England. Biodiversity net gain is the rule that new building must leave nature 10% better off.
The start date is not set yet. The government will confirm it in its response to the consultation. The rule still applies to other sites.
Councils list brownfield land that suits new homes on brownfield land registers. Our map shows 13,512 sites, most of them from these registers.
Source: Budget 2026, para 6.119.
Will building regulations change?
No major changes are planned for the rest of this Parliament, except for building safety.
Safety work includes the Grenfell Inquiry recommendations. The government will also look at easing rules where that helps building.
Source: Budget 2026, para 6.118 and Box 4.A.
What is the Your First Home scheme?
A government loan for first-time buyers in England. It covers 20% of a new-build home's price.
- The deposit is at least 2.5% and at most 15%.
- Household income must be £110,000 or less, or £140,000 in London.
- The loan is interest-free for 5 years. Then it is 1.5% in year 6, and 3% after that.
- Pre-registration opens by the end of 2026. Applications open in February 2027.
- The first loans start in April 2027.
- Funding is £4.7 billion over 5 years.
| Standard 95% mortgage | Your First Home | |
|---|---|---|
| Deposit | £15,000 | £7,500 |
| Government equity loan | None | £60,000 |
| Mortgage | £285,000 | £232,500 |
| Monthly cost, years 1 to 5 | £1,530 | £1,248 |
The monthly costs assume a 5% mortgage rate over 30 years. Loan interest starts in year 6, at 1.5%, then 3% from year 7. In the example, that makes £1,323 a month in year 6. From year 7 it is £1,398.
The OBR is the government's independent forecaster. It expects the scheme to have only a small effect on supply and prices.
Source: Budget 2026, paras 5.5 to 5.6; Your First Home factsheet; OBR, para 2.60 and para 3.22.
What are the price caps and the developer fee?
Caps follow local prices, from £650,000 in inner London to £220,000 in Middlesbrough. Developers pay 1% to 4% of each sale price.
| Area | Price cap |
|---|---|
| Inner London | £650,000 |
| Outer London | £500,000 |
| Reading | £375,000 |
| Manchester | £355,000 |
| North Devon | £320,000 |
| Middlesbrough | £220,000 |
A full list by council is due before applications open. Developers of any size can join by signing a participation agreement. The fee rises with the number of homes you sell through the scheme each year.
| Homes sold through the scheme each year | Fee on the sale price |
|---|---|
| First 100 | 1% |
| 101 to 250 | 3% |
| Above 250 | 4% |
Selling 500 homes a year through the scheme works out at 3.1% on average.
Source: Your First Home factsheet.
What replaces the Lifetime ISA?
A First Time Buyer ISA, for new savers from April 2029. It adds a 25% government bonus towards a first home.
The home must cost £450,000 or less, and the bonus is capped at £20,000. Existing Lifetime ISAs carry on. From 29 October 2026, one Lifetime ISA charge falls from 25% to 20%. It applies when you use the ISA on a home over £450,000.
Source: Budget 2026, paras 6.239 to 6.240.
Will mortgages get easier to get?
Not yet. No lending rule has changed.
The Chancellor has asked the Bank of England to look again at its loan-to-income limits. These limit how much lending can go on large mortgages compared with income. The aim is to help more people buy, without risking financial stability.
Source: Remit for the Financial Policy Committee, Budget 2026.
Will planning documents be easier to find?
Yes, by the end of 2027. Councils in England must publish key planning documents as open data.
The government's AI planning tool, PlanAssist, should reach every council in England by then too. That depends on further testing.
Source: Budget 2026, para 6.117.
What does the OBR expect for house prices?
Growth of about 2% in 2026 and 2.5% in 2027. That is slower than inflation, forecast at 3.1% and 3.4%.
After that, it expects about 2.75% a year from 2028.
- Its forecast assumes Bank Rate rises to just over 4.25% by mid-2027. That follows market prices.
- The average rate on existing mortgages rises from 4% to about 5% by 2031.
- It expects 190,000 fewer new homes over 5 years than it did in March.
- About 220,000 homes a year are added in 2026-27 and 2027-28. That rises to 260,000 by 2030-31.
- It still expects the 2024 planning reforms to help. It blames weak demand, higher interest rates, rising material costs, and regulatory and fiscal changes.
Source: OBR, Economic and fiscal outlook, October 2026, para 2.9, para 2.59, paras 2.60 to 2.61, para 2.21 and para 2.62.
Have a brownfield site? Get a fixed-fee planning quote
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Sources
- Budget 2026 (the Red Book), HM Treasury, 28 October 2026
- Economic and fiscal outlook, October 2026, Office for Budget Responsibility
- Budget 2026 policy costings, HM Treasury
- Your First Home and High Value Council Tax Surcharge factsheets, GOV.UK
Checked against the published documents on . Details can change as legislation is drafted, so check the latest guidance or speak to a qualified adviser before acting. Spotted an error? Email [email protected].
Budget 2026 guides: All 21 points · Tax · Building and buying · Landlords