First-time buyer loans
Prime Minister Andy Burnham proposes new 20% equity loans to help first-time buyers.
Anonymous
Prime Minister Andy Burnham is proposing a new equity-loan program, called Your First Home, to help first-time buyers in England purchase new-build homes, particularly people without family financial support. Buyers could put down a 2.5% deposit and receive a government loan worth 20% of the property's value, initially interest-free; the program is expected to be funded through reprioritized government spending, with developers contributing to running costs. Ministers say the initiative could make homeownership more accessible and encourage builders to construct more homes, while some industry representatives welcome support for demand. The plan revives elements of the earlier Help to Buy program, which helped hundreds of thousands of buyers but was also criticized for potentially inflating house prices; a government review found it delivered substantial value to participants. Further details, including eligibility and any property-price limits, have not yet been confirmed.
Key Points
1
Using Rightmove’s average UK starter-home price of £230,000, the proposed 2.5% deposit would be £5,750, with up to £46,000 in government loan support.
2
The scheme’s full details are expected at the Budget on October 28, and pre-registration is due to open before the end of the year.
3
The Financial Times reported that the government’s 1.5 million-home target is at risk from low building volumes, with officials concerned that a possible Office for Budget Responsibility downgrade to housing forecasts could weaken growth forecasts and reduce fiscal headroom.
4
The original Help to Buy included both an equity loan and a mortgage guarantee; it is not yet clear whether the new plan would revive both products.
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