The Government is expected to make its new help-to-buy scheme more generous than initially planned, raising the household income cap to £110,000 outside London and £140,000 within the capital, according to The Times.
Prime Minister Andy Burnham unveiled the Your First Home policy ahead of the Labour party conference in late September. The scheme will allow first-time buyers to obtain Government-backed equity loans covering 20% of the value of new builds in England, but only for properties bought from developers who have signed up to the initiative.
A deposit of just 2.5% will be required, with an initial interest-free period, opening the scheme to many more Britons than under previous support.
Income cap raised to widen eligibility
Your First Home seeks to focus support on those most in need by introducing a household income cap. The Times reports that the Government had initially decided the cap would be £90,000 outside London and £110,000 within it.
However, the newspaper reports that the cap has now been raised to £110,000 and £140,000 respectively, allowing millions more people to take advantage of the scheme. The change came after ministers recognised that many middle-earning joint households would be excluded.
The previous Help to Buy scheme, which ran from 2013 to 2023, required a 5% deposit and had no income cap, meaning it could be used by more well-off buyers to reduce costs, contributing to rising property prices.
Budget announcement expected
The policy is expected to be laid out at the Budget next week, the first of Chancellor John Healey's tenure. An HM Treasury spokesperson said: “We do not comment on speculation.”
Mr Burnham exclusively revealed the plans in an interview with the Sunday Mirror last month, saying: "We are coming back at this whole question of helping first-time buyers onto the housing ladder, particularly those who can't call on the famous bank of mum and dad."
He said his Government would put forward a proposal they believe will help younger people who would otherwise struggle or not be able to purchase a property, and that the scheme would stimulate the building of new properties.
Mr Healey faces an uncertain economic backdrop ahead of the Budget and must balance the need to boost the country's finances with providing support to alleviate cost-of-living pressures. He is expected to reveal plans for a number of cost-of-living measures, alongside moves to hike taxes for banks and gambling firms.
