The Labour government is launching 'Your First Home', a new scheme designed to assist first-time buyers by reducing the required deposit to as little as 2.5% of a property's price. This marks a change from the previous Help to Buy scheme, which required a 5% deposit.
The initiative includes a 20% equity loan from the government, which will have an interest-free period. Housebuilders participating in the scheme will be required to pay a fee.
An independent report published by the housing department earlier this month concluded that the previous Help to Buy scheme offered "very high value for money," with a net present social value of £25.1bn over its 2013-2023 lifespan. The report also estimated its inflationary impact at two percentage points.
Further details regarding the household income cap, regional property price caps, and the duration of the interest-free period are anticipated to be announced in the budget next month.