A new help-to-buy scheme aimed at giving first-time buyers who cannot rely on the “bank of mum and dad” is to be introduced in a big policy announcement by Andy Burnham.
The programme, called “Your first home”, is intended to help buyers in England who have a regular income but have been unable to save for a large deposit or don’t have financial support from their family.
Under the scheme, first-time buyers will get a ۲۰% equity loan to help them buy a new-build home, with an initial interest free period and a requirement of a minimum deposit of just ۲.۵%.
Household income caps and a deposit cap will be introduced to exclude those on the biggest salaries and with big savings pots, with the scheme targeted at those who may struggle to buy a home on their own. Price caps will ensure people can only buy modest houses.
In an interview with the Guardian on the eve of Labour’s party conference in Liverpool, the prime minister said: “Too many young people are struggling with housing, with many giving up hope on ever having a home to call their own.
“So we are going to help more first-time buyers on to 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.”
Burnham also unveiled plans to strengthen the powers of local leaders to take over long-term empty and derelict homes, reversing changes made by the Conservatives.
Housing ministers and officials under Keir Starmer’s government argued for a new version of help to buy but were ultimately overridden by then chancellor, Rachel Reeves, who wanted to focus more on boosting housing supply.
Some changes have been made to George Osborne’s original scheme, under which ۳۸۷,۰۰۰ people were supported, after concerns it was targeted at those who would have got on the housing ladder anyway and contributed to soaring house prices.
“We think some adjustments needed to be made to it to make it focus on the people who really need support, and I think our scheme does that,” Burnham said.
Officials said the programme, which will be announced by John Healey in the budget and open for registration by the end of ۲۰۲۶, would be funded by reprioritising existing government budgets. It was not immediately clear whether the money would come from funding already earmarked for housebuilding, or would mean cuts elsewhere.
Developers will pay a fee related to property values to participate, which will contribute to its running costs. Burnham denied the scheme would just push up house prices even higher by driving up demand, saying that the government would also make sure more homes were built across the board.
“No, it’s also about making sure that we are building more homes across the board … We are working actually to increase supply of housing, which also helps in terms of not pushing prices up,” he said.
However, Angela Rayner, the housing secretary, acknowledged last weekend that there was only a “slim chance” the government would meet its target of building ۱.۵m homes in England by the next election.
In ۲۰۱۳, George Osborne announced the first help-to-buy scheme, offering taxpayer-backed loans to reduce the deposit buyers would need. Later that year, he launched a second version.
Both applied to homes worth up to £۶۰۰,۰۰۰, and by ۲۰۱۴-۱۵, they supported about a fifth of first-time buyer purchases. The schemes proved popular, but were criticised for failing to help those who needed them most.
In ۲۰۲۰, a further iteration of the scheme allowed buyers to borrow up to ۲۰% of a new-build property’s value, or ۴۰% in London, but was no longer available to movers and was subject to new regional caps on prices.
Help to buy represented “very high value for money”, according to a government review, which calculated it provided £۲۵bn of social value to the UK in the last financial year, despite criticisms over cost and impact.
The government will also update empty dwelling management orders (Edmos) to allow councils to make more than ۳۰۰,۰۰۰ dwellings classed as “long-term empty” available to provide housing for families in need.
The period a property must be empty before it becomes eligible for an Edmo will be reduced from two years to six months, to prevent homes from falling into serious disrepair and accelerating their return to use.
Local authorities will no longer face the same evidential requirements to provide to the residential property tribunal, simplifying the process and empowering empty homes officers to act more decisively and with greater speed.
