{"id":785578,"date":"2026-09-28T19:26:12","date_gmt":"2026-09-28T19:26:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/785578\/"},"modified":"2026-09-28T19:26:12","modified_gmt":"2026-09-28T19:26:12","slug":"labours-modest-reheat-of-help-to-buy-is-worth-a-try-nils-pratley","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/785578\/","title":{"rendered":"Labour\u2019s modest reheat of help to buy is worth a try | Nils Pratley"},"content":{"rendered":"

There may be three reasons why the Labour<\/a> government has hesitated until now to reheat the Tories\u2019 decade-long help-to-buy scheme. First, the inflationary risks of throwing subsidies at the housing market at a moment when wider inflation, driven by energy prices and the Iran war, is on the march.<\/p>\n

Second, the political awkwardness of turning to George Osborne\u2019s playbook. Third, the spectre of Jeff Fairburn, the shameless former boss of Persimmon who bagged a \u00a375m bonus in 2018<\/a> as help to buy turbo-charged the value of his share-based incentives. The government would look foolish if, in its desperation to meet its housebuilding targets (or just miss them by a smaller margin), it created more Fairburns.<\/p>\n

So is Your First Home<\/a> \u2013 Labour\u2019s incarnation \u2013 justified? On balance, it\u2019s probably worth a punt. Something has to happen to try to shift the housebuilding sector out of its current funk. The way things are going, and the way mortgage rates are heading, Labour won\u2019t merely miss its target of 1.5m new homes in England in this parliament, it will be short by a few hundreds of thousands.<\/p>\n

Like it or not, the government needs the private firms to boost construction. At the moment, the prevailing narrative is grumbles over labour costs, raw material costs, tax, regulation and more. Share buy-backs are being preferred over new projects.<\/p>\n

A tweak on the \u201caffordability\u201d dial at least has the virtue of getting results. Or, at least, that was a top-line conclusion in the official independent report published by the housing department<\/a> earlier this month on help to buy. The scheme represented \u201cvery high value for money\u201d, it said, with a net present social value of \u00a325.1bn, in 2025 money, over its 2013-2023 lifetime thanks to the increase in housing supply. As for the inflationary impact, the report put it at two percentage points \u2013 far lower than popularly believed.<\/p>\n

From the government\u2019s point of view, those trade-offs will look attractive when there is little else to excite in the economic outlook for 2027. Being seen to do something for aspiring first-time buyers unable to get on to the housing ladder is rarely a bad political look.<\/p>\n

Just don\u2019t expect miracles. The 10%-plus jump in housebuilders\u2019 shares prices on Monday, from beaten-down levels, may give a misleading impression. Your First Home will reduce the first-time buyer\u2019s deposit to as little as 2.5% of the price of the property, from 5% under help to buy, but it is being launched in a very different climate.<\/p>\n

Back in 2013, interest rates were on the floor, and they would remain so for years. Now, the Bank rate stands at 3.75%, and the debate is about how many hikes Threadneedle Street has in store. A 20% equity loan from the government, with an interest-free period, makes a difference but obviously does not remove the impact of borrowing rates on the rest of the mortgage. And in this case the housebuilders will have to pay a fee to access the scheme \u2013 quite rightly, but they will presumably look to recoup some of that expense in the selling price.<\/p>\n

Full details, including the household income cap, the property price caps by region and the interest-free period, will arrive in the budget next month. All matter, so it\u2019s too soon to make firm judgments. But the general principle here is to try to stimulate more supply of new-builds by modestly improving affordability for first-time buyers. In current circumstances, it\u2019s not unreasonable.<\/p>\n","protected":false},"excerpt":{"rendered":"There may be three reasons why the Labour government has hesitated until now to reheat the Tories\u2019 decade-long…\n","protected":false},"author":2,"featured_media":785579,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-785578","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/785578","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=785578"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/785578\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/785579"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=785578"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=785578"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=785578"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}