Prime Minister Andy Burnham has announced a new help-to-buy scheme designed to assist first-time buyers who do not have access to the 'bank of mum and dad'. The scheme was unveiled on September 26 as Mr Burnham arrived in Liverpool for the Labour Party Conference taking place this weekend.
Under the new initiative, first-time buyers could secure the keys to their home with a deposit of just 2.5% saved. A loan worth 20% of the property's value will be available to help fund the purchase. This equity loan will initially be interest-free to ensure it remains affordable, according to PA.
Deposit and loan figures
With the national average first-time home costing £230,000, according to Rightmove, a buyer could put down a deposit of £5,750 and access a loan of up to £46,000 to assist with the purchase.
The Prime Minister said he was concerned by the high number of young people who have given up on home ownership because of high living costs, and wanted to change that. Full details of the scheme will be set out at the Budget on October 28 by the Chancellor John Healey.
Government support and funding
Announcing the scheme, Andy 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.
“So we will step in to help more first-time buyers onto the housing ladder, especially those who can’t call on the bank of mum and dad.
“Your First Home will get them the keys to their own front door, and give builders the confidence to deliver the high-quality new homes the country needs. This Labour government is bringing back hope for people across the country.”
Funding for the scheme is expected to come from reprioritising existing Government budgets. Housing developers will also pay towards the running costs of the scheme, which ministers hope will give the industry confidence to build new homes.
Housing Secretary's response
Housing Secretary Angela Rayner said: “We’ve seen too many people priced out and giving up on the dream of ever having a home to call their own.
“This scheme will make getting on the first rung of the property ladder just that bit easier and increase access to home ownership.
“For those looking for their first home, this is a Labour government that is on your side and fighting your corner.
“Your First Home will build on the lessons learned from previous schemes, while retaining the benefits, giving more families the building blocks for a better life and boosting the housing market as we turn the page on the housing crisis the Tories left behind.
“We’re delivering a new generation of equity loans in a Labour way, targeting support to those first-time buyers who need support the most and who don’t have the benefit of a large deposit from the bank of mum and dad.”
