'Your First Home': A 2.5% Deposit Scheme for First-Time Buyers
Buyers in England will be able to purchase a new build with a minimum deposit of 2.5%, supported by a government equity loan of 20% with an initial interest-free period. Household income, deposit and property price caps will exclude higher earners, developers will pay a fee towards running costs, and the money comes from reprioritising existing budgets. Full detail arrives with the Budget on 28 October, with pre-registration before the end of the year.
This is help-to-buy in all but name, and the caps are where the politics lives: set them high and it subsidises people who would have bought anyway while pushing new-build prices up, set them low and it helps too few to notice. The Prime Minister’s pitch was generational — too many young people are “giving up hope of ever having a home to call their own”, and the scheme “will get them the keys to their own front door, and give builders the confidence to deliver”. Ms Rayner was explicit about the distinction she wants drawn from the last version: “we’re delivering a new generation of equity loans in a Labour way, targeting support to those first-time buyers who need support the most”. That the funding is reprioritised rather than new is the constraint. Watch the caps on 28 October.