Prime Minister Andy Burnham has announced a new scheme to help first-time buyers get onto the housing ladder. People without support from the “bank of mum and dad” who want to purchase their first home will get access to the new Help-to-Buy scheme, the Prime Minister announced.
Mr Burnham 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. First-time buyers could get the keys to their home with just a 2.5% deposit saved as a result of the Your First Home scheme.
Equity loan details
A loan worth 20% of their property’s value will be available to help pay for the purchase as part of the scheme. This equity loan will initially be interest-free to ensure it remains affordable.
With the national average first-time home costing £230,000 according to Rightmove, this means that a buyer could put down a deposit of £5,750, and access a loan of up to £46,000 to help with the purchase.
Full details of the scheme will be set out at the Budget on October 28 by the Chancellor John Healey.
Prime Minister’s announcement
Announcing the scheme as he arrived in Liverpool for Labour’s annual conference, the Prime Minister 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 and opposition 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.”
Shadow housing secretary Katie Lam said Labour was “finally admitting that they will fail to deliver the homes they promised”.
She added: “Now it wants first-time buyers to take on even more debt to afford the few homes that have been built, with taxpayers taking a stake in their homes and picking up the bill for months.
“Slapping another levy on developers risks pushing up the price of new homes too. 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.
“Only the Conservatives have a plan to scrap stamp duty, back British house builders and ensure that the homes we desperately need are built in the places that people actually want to live.”
