Prime Minister Andy Burnham is to introduce a new scheme to try to help young people get on the property ladder.<\/p>\n
The “Your First Home” scheme would be open to first-time buyers in England with a deposit of 2.5%. It would provide them with a loan worth 20% of their new build property’s value to help pay for the purchase.<\/p>\n
Burnham said people who do not have support from the “bank of mum and dad” are among those the scheme would aim to help.<\/p>\n
There would be an initial interest-free period for the equity loan, with more details expected in next month’s Budget.<\/p>\n
The Conservatives warned the policy would leave first-time buyers taking on more debt and risks “pushing up the price of new homes”.<\/p>\n
Burnham said: “Too many young people are struggling with the cost of housing, with many giving up hope of ever having a home to call their own.<\/p>\n
“So we will step in to help more first-time buyers on to the housing ladder.”<\/p>\n
The PM added he believes the scheme will give builders the “confidence to deliver the high-quality new homes the country needs”.<\/p>\n
Funding for the scheme is expected to come from reprioritising existing budgets, but housing developers will pay towards the running costs.<\/p>\n
Ministers have not yet confirmed whether there is an age restriction on the scheme, or a cap on the price on the value of the property.<\/p>\n
The policy is similar to initiatives from previous governments, including the coalition’s Help To Buy scheme, introduced in 2013 by then-Chancellor George Osborne.<\/p>\n
It expanded a previous scheme, known as FirstBuy, which was aimed solely at first-time buyers.<\/p>\n
Help to Buy initially enabled all purchasers to put down a 5% deposit on a newly built home, with a value of up to a \u00a3600,000.<\/p>\n
Up to 20% of the cost of the home was funded by a shared equity loan, which was interest-free for the first five years.<\/p>\n
The first version of the programme was active until 2021. A second iteration of the scheme, which ran until 2023, restricted access to first-time buyers and applied regional-level price caps to the properties that could be bought.<\/p>\n
An evaluation of the scheme, external<\/a> found more than 387,000 properties were purchased through it, of which 328,000 were by first-time buyers.<\/p>\n In its conclusion, the report noted Help to Buy was “effective in supporting people into home ownership in some areas, but did not remove affordability barriers for first-time buyers in areas that were already relatively expensive”.<\/p>\n Housing Secretary Angela Rayner said “Your First Home” would “build on the lessons learned from previous schemes, while retaining the benefits”.<\/p>\n The Home Builders Federation welcomed the proposals, saying it had “long called for action to improve access to home ownership”.<\/p>\n “Our analysis shows a well-designed scheme can make a meaningful difference for households struggling to get on to the property ladder,” it added.<\/p>\n Conservative shadow housing secretary Katie Lam accused Labour of wanting first-time buyers to “take on even more debt to afford the few homes that have been built”.<\/p>\n She added taxpayers would take a “stake in their homes” and be “picking up the bill for months”.<\/p>\n Lam said: “Slapping another levy on developers risks pushing up the price of new homes too. <\/p>\n “This is a colossal admission of failure. This Labour government is making homes harder to build, then asking buyers to borrow more to pay for them.”<\/p>\n Lam said the Conservatives want to scrap stamp duty, “back British house builders” and ensure that houses are “built in the places that people actually want to live”.<\/p>\n Rayner told the BBC earlier this month that there was only a “slim chance” the government would meet its target of building 1.5m homes<\/a> in England by the next election, but said she was “not giving it up”.<\/p>\n