A new help-to-buy scheme aimed at giving first-time buyers who cannot rely on the “bank of mum and dad” is to be introduced in a big policy announcement by Andy Burnham. The programme, called “Your first home”, is intended to help buyers in England who have a regular income but have been unable to save for a large deposit or don’t have financial support from their family. Under the scheme, first-time buyers will get a 20% equity loan to help them buy a new-build home, with an initial interest free period and a requirement of a minimum deposit of just 2.5%.
Household income caps and a deposit cap will be introduced to exclude those on the biggest salaries and with big savings pots, with the scheme targeted at those who may struggle to buy a home on their own. Price caps will ensure people can only buy modest houses. In an interview with the Guardian on the eve of Labour’s party conference in Liverpool, the prime minister said: “Too many young people are struggling with housing, with many giving up hope on ever having a home to call their own.
Housing ministers and officials under Keir Starmer’s government argued for a new version of help to buy but were ultimately overridden by then chancellor, Rachel Reeves, who wanted to focus more on boosting housing supply. Some changes have been made to George Osborne’s original scheme, under which 387,000 people were supported, after concerns it was targeted at those who would have got on the housing ladder anyway and contributed to soaring house prices. Officials said the programme, which will be announced by John Healey in the budget and open for registration by the end of 2026, would be funded by reprioritising existing government budgets.
It was not immediately clear whether the money would come from funding already earmarked for housebuilding, or would mean cuts elsewhere. Developers will pay a fee related to property values to participate, which will contribute to its running costs. Burnham denied the scheme would just push up house prices even higher by driving up demand, saying that the government would also make sure more homes were built across the board.
However, Angela Rayner, the housing secretary, acknowledged last weekend that there was only a “slim chance” the government would meet its target of building 1.5m homes in England by the next election. In 2013, George Osborne announced the first help-to-buy scheme, offering taxpayer-backed loans to reduce the deposit buyers would need. Later that year, he launched a second version.
Both applied to homes worth up to £600,000, and by 2014-15, they supported about a fifth of first-time buyer purchases. The schemes proved popular, but were criticised for failing to help those who needed them most. In 2020, a further iteration of the scheme allowed buyers to borrow up to 20% of a new-build property’s value, or 40% in London, but was no longer available to movers and was subject to new regional caps on prices.
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