Funding drawn from existing budgets; echoes 2013 Help to Buy scheme

UK Prime Minister Andy Burnham announced a new scheme intended to help young people onto the property ladder, requiring a 2.5% deposit from first-time buyers in England and providing a government loan worth 20% of the new-build property’s value. He made the announcement as he arrived in Liverpool ahead of his first Labour Party conference as prime minister, according to BBC News reporting.

The “Your First Home” programme would be open to first-time buyers in England and would provide a loan worth 20% of the property’s value, Burnham said. Labour said the loan would carry an initial interest-free period, though the BBC did not specify its length. Pre-registration will open before the end of the year, and further details are expected in next month’s Budget.

Burnham framed the scheme as an intervention for buyers without access to family wealth. “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,” he said. He added: “So we will step in to help more first-time buyers onto the housing ladder.”

The prime minister said the scheme would give builders the “confidence to deliver the high-quality new homes the country needs.” Funding for the initiative is expected to come from reprioritising existing budgets, with housing developers contributing to the running costs, according to the BBC report.

Ministers have not yet confirmed whether the scheme will include an age restriction or a cap on the value of eligible properties. Burnham did not address either question in his remarks.

The policy is similar to previous government programmes aimed at expanding first-time buyer access. The coalition’s Help to Buy scheme, introduced in 2013 by then-Chancellor George Osborne, initially enabled all purchasers to put down a 5% deposit on a newly built home. Up to 20% of the cost of the home was funded through a shared equity loan that was interest-free for the first five years. Help to Buy itself expanded an earlier programme known as FirstBuy, which was aimed solely at first-time buyers.

The announcement came as Burnham arrived in Liverpool for the Labour Party conference, his first since taking office as prime minister.