Burnham announces scheme to help first-time buyers onto housing ladder

Prime Minister Andy Burnham is to introduce a new scheme to try to help people "who have given up hope of ever having a home to call their own" get on the property ladder.

The "Your First Home" scheme would be open to first-time buyers in England with a deposit of 2.5%. It would provide them with a loan worth 20% of their new build property's value to help pay for the purchase.

On Sunday, the government also shared plans it said would make it simpler for councils to take over empty homes to provide housing for those in need.

The announcements come as the prime minister prepares for his first Labour conference as leader.

With the "Your First Home" scheme, which was first announced on Saturday, there would be an initial interest-free period for the equity loan - more details on how it would work are expected in next month's Budget.

The Conservatives warned the policy would leave first-time buyers taking on more debt and risks "pushing up the price of new homes" - the prime minister said those who do not have support from the "bank of mum and dad" are among those who it would aim to help.

Burnham said: "Too many young people are struggling with the cost of housing, with many giving up hope of ever having a home to call their own.

"So we will step in to help more first-time buyers on to the housing ladder."

The PM added he believes the scheme will give builders the "confidence to deliver the high-quality new homes the country needs".

Funding for the scheme is expected to come from reprioritising existing budgets, but housing developers will pay towards the running costs.

Ministers have not yet confirmed whether there is an age restriction on the scheme, or a cap on the price on the value of the property.

On Sunday morning, the government also announced plans to strengthen council powers to take over empty homes to meet the need for council houses.

It would, Labour said, make it simpler for councils to bring some of the more than 300,000 empty dwellings into use for essential housing.

The plans were unveiled by Housing Secretary Angela Rayner ahead of the party's conference in Liverpool.

Conservative shadow minister for state housing and planning Gareth Bacon accused her of "desperately reaching for any lever she can find" to hit "Labour's 1.5 million homes target".

The "Your First Home" policy is similar to initiatives from previous governments, including the coalition's Help To Buy scheme, introduced in 2013 by then-Chancellor George Osborne.

It expanded a previous scheme, known as FirstBuy, which was aimed solely at first-time buyers.

Help to Buy initially enabled all purchasers to put down a 5% deposit on a newly built home, with a value of up to £600,000.

Up to 20% of the cost of the home was funded by a shared equity loan, which was interest-free for the first five years.

The first version of the programme was active until 2021. A second iteration of the scheme, which ran until 2023, restricted access to first-time buyers and applied regional-level price caps to the properties that could be bought.

An evaluation of the scheme found more than 387,000 properties were purchased through it, of which 328,000 were by first-time buyers.

In its conclusion, the report noted Help to Buy was "effective in supporting people into home ownership in some areas, but did not remove affordability barriers for first-time buyers in areas that were already relatively expensive".

Rayner said "Your First Home" would "build on the lessons learned from previous schemes, while retaining the benefits".

The Home Builders Federation welcomed the proposals, saying it had "long called for action to improve access to home ownership".

"Our analysis shows a well-designed scheme can make a meaningful difference for households struggling to get on to the property ladder," it added.

Conservative shadow housing secretary Katie Lam accused Labour of wanting first-time buyers to "take on even more debt to afford the few homes that have been built".

She added taxpayers would take a "stake in their homes" and be "picking up the bill for months".

Lam said: "Slapping another levy on developers risks pushing up the price of new homes too.

"This is a colossal admission of failure. This Labour government is making homes harder to build, then asking buyers to borrow more to pay for them."

Lam said the Conservatives want to scrap stamp duty, "back British house builders" and ensure that houses are "built in the places that people actually want to live".

Rayner told the BBC earlier this month that there was only a "slim chance" the government would meet its target of building 1.5m homes in England by the next election, but said she was "not giving it up".

Data up to June this year suggested the government was behind on the rate of construction needed to meet the goal, which housebuilders have previously warned was too optimistic.

BBC Verify analysis showed a decline in the number of new houses being built during Labour's first year in power - continuing a fall that began under the Conservatives.

The housing policy announcements come as Burnham arrives in Liverpool ahead of his first Labour Party conference since becoming prime minister.

The PM said he wanted to make it a "really important week where we set out a new direction for the country".

He added: "We've had a decade since Brexit and it's been a decade of too much drift, too much division, and we need to draw a line on that."

In an interview with the Guardian, the prime minister said he can deliver on his promise of radical change for the country.

"There's always things you can do; it's just whether you're prepared to do them," he said.

"The public would have more respect for us if we go and grab something difficult… and say, 'Right, we're going to do something here', rather than constantly playing the political game before fixing the problems."

He also criticised previous governments for failing to tackle difficult issues - including housing supply - saying there are no "easy or quick wins" and longer-term reform is needed.

Another pre-conference announcement included a pledge to offer quicker access of a guaranteed job to young people receiving health or disability support.

The offer would be made three months after they start claiming benefits. This approach would be introduced from next April.

Labour said the government would cover 100% of wage costs for up to 25 hours a week for six months.

Currently, jobless young people aged 18 to 24 must have been on universal credit for 18 months before receiving an offer under the government's job guarantee scheme.

Conservative shadow work and pensions secretary Helen Whately said Labour should have cut "burdens" on businesses to help ensure disabled people are employed.

She said: "Instead, they are bringing back a Conservative post-pandemic scheme. Andy Burnham clearly has no new ideas."

Whately also questioned how the change would be funded.

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