UK to Confirm “Your First Home” Equity Loan Scheme in October Budget

LONDON: The British government has announced that its new “Your First Home” equity loan scheme will be formally confirmed in next month’s budget, as part of efforts to support first-time buyers and stimulate housebuilding.

The scheme, which revives elements of the former “Help to Buy” programme, is designed to help eligible first-time buyers purchase newly built homes with smaller deposits.

Under the proposed arrangement, buyers would be able to make a deposit of as little as 2.5%, while the government would provide an equity loan of up to 20% of the property’s market value. The government-backed loan would be interest-free for the first five years.

Eligible buyers would be able to purchase new-build properties valued at up to £600,000, with a mortgage covering 75% of the property’s value. The equity loan would have to be repaid when the property is sold, within 25 years, or alongside repayment of the main mortgage, according to the government’s plans.

The programme will include household income limits and regional property-price caps, with the government saying these measures are intended to target support at households that meet the eligibility criteria.

Housing developers participating in the programme will also be required to make a financial contribution towards its costs.

The government said the initiative is intended not only to assist first-time buyers but also to increase demand for newly built homes and support growth in the UK construction and housing sectors.

The previous Help to Buy scheme operated from 2013 to 2022 and helped more than 350,000 people purchase newly built homes. The new programme is expected to be formally confirmed as part of the government’s October budget.