Prime Minister Andy Burnham has announced a new housing initiative, titled "Your First Home," designed to assist young first-time buyers in England to purchase properties with a deposit of just 2.5%.
Announced on the eve of the Labour Party conference in Liverpool, the program will offer buyers an equity loan worth 20% of a newly built property's value. The loan will feature an initial interest-free period, with further specifics expected to be outlined in the upcoming Budget next month. Burnham highlighted that the scheme specifically targets individuals who lack financial backing from the "bank of mum and dad."
Funding for the scheme is expected to come from reprioritising existing budgets, but housing developers will pay towards the running costs. At present, ministers have not confirmed whether the scheme will enforce an age limit or set a maximum cap on property values. Burnham expressed confidence that the program will provide developers with the necessary assurance to construct high-quality new homes across the country.
The "Your First Home" initiative draws comparisons to previous government programs, notably the 2013 Help to Buy scheme launched by then-Chancellor George Osborne under the coalition government. Help to Buy, which expanded the earlier FirstBuy initiative, permitted buyers to secure newly built homes valued up to £600,000 with a 5% deposit and a 20% shared equity loan that was interest-free for five years.
The initial version of Help to Buy operated until 2021, followed by a second phase ending in 2023 that restricted access to first-time buyers and introduced regional price caps. An evaluation of the program revealed that it supported the purchase of over 387,000 homes, including 328,000 by first-time buyers. However, the evaluation concluded that while the scheme successfully aided homeownership in certain areas, it failed to overcome affordability barriers in already expensive regions.
Housing Secretary Angela Rayner stated that the new "Your First Home" scheme would build upon lessons learned from past initiatives while preserving their advantages. The Home Builders Federation also welcomed the announcement, noting it has long advocated for improved homeownership access and that its analysis indicates a well-structured scheme can significantly assist struggling households.
The policy drew sharp criticism from Conservative shadow housing secretary Katie Lam, who warned that the plan would force first-time buyers to accumulate more debt to purchase the limited number of homes being built. Lam argued that taxpayers would end up holding a stake in these properties and covering costs for months.
Lam said: "Slapping another levy on developers risks pushing up the price of new homes too," calling the policy a "colossal admission of failure" where the government makes home construction harder and then expects buyers to borrow more.
Lam stated that the Conservatives instead favor scrapping stamp duty, supporting British builders, and focusing construction where people want to live.
This policy roll-out comes amid challenges in meeting housing targets. Rayner recently acknowledged that there is only a "slim chance" the government will achieve its goal of constructing 1.5 million homes in England by the next election, though she remains committed to the target. Construction data up to June indicated that the government is falling behind the rate required to meet this objective.
Analysis also showed a drop in new home construction during Labour's first year in power, continuing a downward trend that began under the prior Conservative administration.
The housing announcement coincided with Burnham's arrival in Liverpool for his first Labour Party conference as prime minister. Burnham framed the event as an opportunity to establish a new direction for the country. He added: "We've had a decade since Brexit and it's been a decade of too much drift, too much division, and we need to draw a line on that." Alongside the housing policy, Labour announced an employment scheme where the government will cover 100% of wage costs for up to 25 hours a week over six months.
Conservative shadow work and pensions secretary Helen Whately criticized the employment measure, arguing that the government should instead reduce burdens on businesses to support the employment of disabled people. Whately accused Burnham of having "no new ideas" and simply reviving a post-pandemic Conservative scheme, while also raising questions about how the initiative would be funded.
