The government today announced a new equity loan scheme, 'Your First Home', for first-time buyers in England. The scheme is set to be confirmed at next month's Budget and aims to support more people into homeownership.
The initiative is expected to support deposits of 2.5%, with 20% government-backed equity loans, for prospective first-time buyers purchasing new-build properties from participating developers. Those using the scheme could access equity loans with an initial interest-free period, potentially saving hundreds of pounds per month compared to a 95% mortgage.
The 'Your First Home' scheme is intended to address the deposit barrier for first-time buyers and will include a household income cap and local property price caps. Developers are expected to contribute to the scheme to help cover costs. The government also stated the scheme would act as a stimulus for the new-build housing market, which is currently facing challenges from international economic pressures and rising construction costs.