UK PM Burnham unveils ‘Your First Home’ scheme for first-time buyers

Prime Minister Andy Burnham has announced a new Help to Buy-style scheme aimed at helping first-time buyers who have struggled to get on the property ladder without financial support from their families.Under the proposed “Your first home” programme, eligible buyers will receive an equity loan worth 20% of the price of a new-build property, with an initial interest-free period.Buyers will need to put down a minimum deposit of 2.5%, significantly reducing the upfront cost of purchasing a home.The scheme will be targeted at households that may struggle to buy without government assistance. Income limits and a cap on applicants’ savings will be introduced to prevent people on higher salaries or with substantial deposits from accessing the support.There will also be price limits on properties that can be purchased through the scheme, restricting eligibility to more modest homes.In an interview with the Guardian ahead of the Labour Party’s annual conference in Liverpool, Burnham said the programme was intended to help younger people facing difficulties entering the housing market.“Too many young people are struggling with housing, with many giving up hope on ever having a home to call their own,” Burnham said.“So we are going to help more first-time buyers on 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,” he added.The scheme is also intended to increase demand for new-build properties and support housing construction, as the government seeks to stimulate growth in the wider economy.The announcement comes ahead of Labour’s annual conference in Liverpool, where Burnham is expected to set out his plans for delivering what he has described as “good growth in every postcode, hope in every heart”.It also follows a warning from the Bank of England that interest rates could rise later this year, potentially increasing borrowing costs for people seeking mortgages.How the new scheme compares with help to buyThe proposed programme follows the earlier Help to Buy initiative launched by George Osborne in 2013, when he was chancellor under then-prime minister David Cameron.The original scheme allowed first-time buyers to purchase new-build properties with a 5% deposit and a government-backed equity loan of up to 20% of the property's value. The maximum loan was 40% for properties in London.Help to Buy ran until 2020 and supported more than 300,000 people in purchasing their first home.The programme faced criticism from some industry experts, who argued that government-backed support could push up house prices and benefit developers.However, an independent government evaluation published earlier this month gave a positive assessment of its overall impact.The review found that Help to Buy achieved its two main objectives of increasing access to home ownership and supporting housing supply.It estimated that the scheme generated around £25bn in social value at a cost of about £3bn.“The evaluation found that the Help to Buy scheme had an overall positive impact on housing supply across England,” the report said.The evaluation estimated that around 15% of new-build homes constructed in England between 2013 and 2023 resulted from Help to Buy 1 and Help to Buy 2.It also found a positive impact on construction jobs and described the scheme as representing “very high value for money”.You use AI every day. Now get your AI Quotient. Take the AIQ test.