Applications expected to open next February with full details of price caps for initiative to be published shortly
John Healey has announced the Your First Home equity loan scheme will receive £4.7bn of funding over five years.
In his maiden Budget today, the chancellor unveiled more details of the scheme which is intended to boost demand in the ailing housebuilding market and enable more people to get on the property ladder.
The scheme, which will allow first-time buyers to purchase a home with a 2.5% deposit with an equity loan worth 20% of the purchase price.
“Hope starts with a home, a route off the streets, a secure home to raise your kids, the keys to your own front door, delivered to the British people by this Labour government,” Healey said.
In guidance today, the government said the scheme is expected to open for applications in February.
It said in order to use the scheme buyers would need to be a first-time buyer; buy a new-build home in England, within the relevant local price cap; use the property as their main home; be able to obtain a mortgage and have a total annual household income of £110,000 or less outside London, or £140,000 or less within London.
The government, however, did not publish full details of the scheme’s local price caps today. The price caps will state the maximum sale price where Your First Home can be used.
It instead published a few example price caps, showing a cap of £375,000 for Reading, £320,000 for North Devon, £355,500 for Manchester and £220,000 in Middlesbrough. Its indicative cap for inner London was £650,000 and outer London £500,000.
More information about eligible homes, participating developers and lenders, and how to apply will be published before applications open.
The government also today announced it will introduce a new First Time Buyer ISA from April 2029, it will replace the Lifetime ISA but will be solely for the purposes of buying a first home, rather than having a dual purpose of also building up long-term savings. Would-be buyers will be able to put £4,000 a year into the new ISA and use it for properties worth £450,000.
At-a-glance: Budget housing measures
- Reforms to ‘green book’ used by Treasury to assess business case for investing in projects - new guidance on developing place-based business cases which will mean housing projects can be considered together with other types of development
- Extra £1.5bn for the Social and Affordable Homes Programme
- New £4.7bn Your First Home equity loan scheme aimed at supporting 70,000 first-time buyers with up to 20% government equity loans
- Removal of BNG requirements on brownfield land up to 1.5 hectares
- Cheaper borrowing for councils for housing by extending the preferential Public Works Loan Board rate for a further year, to 2027-28, at 40 basis points below the PWLB normal rate
- Zero-rate of VAT for land sold to registered providers of social housing
- Flexible funding to invest in local authorities, boosted by £1.5bn of devolved loans for mayoral authorities - will back transport and regeneration projects
- Roadmap for fiscal devolution - 100% of business rates will be retained by end of the decade
- £100m local apprenticeship service funded from savings in welfare fraud and error
- White paper and legislation next year on reforming welfare system following Milburn report
- Further £430m for rough sleeping
- No changes to building regulations for the rest of parliament, except building safety
- The government will introduce a new First Time Buyer ISA from April 2029
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