Burnham unveils 2.5% deposit plan for first-time buyers

Prime Minister Andy Burnham has announced a scheme intended to help first-time buyers in England purchase new-build homes with deposits of 2.5%. The proposed “Your First Home” programme would provide an equity loan worth 20% of a property’s value. The government says the policy is aimed particularly at people who lack financial support from family members.

The loan would initially be interest-free, although ministers are expected to provide more details in next month’s Budget. The government has not confirmed whether the scheme will include an age limit or a maximum property value. Funding is expected to come from reprioritised existing budgets, while housing developers would contribute towards running costs.

Burnham said the policy could give builders confidence to deliver new homes. The Conservatives criticised the proposal. They argued that it would leave first-time buyers with more debt and could increase the price of new homes.

Conservative housing spokesperson Katie Lam said taxpayers would take a stake in buyers’ homes and could end up carrying the cost. The announcement resembles previous shared-equity initiatives, including Help to Buy. An evaluation cited in the supplied report found that more than 387,000 homes were purchased through Help to Buy, including 328,000 by first-time buyers, but said it had not removed affordability barriers in already expensive areas.

The government also announced plans to make it easier for councils to take over some of the more than 300,000 empty dwellings for essential housing. Housing Secretary Angela Rayner said ministers would explore changes to protect councils from the costs of acquiring empty homes. The announcements come before Labour’s conference in Liverpool.

The government has a target of building 1.5 million homes in England, but data cited in the report indicates construction is behind the required pace.