Burnham unveils "Your First Home" equity loan plan for first-time buyers

Prime Minister Andy Burnham has unveiled a government-backed scheme designed to ease the route onto the housing ladder for young people unable to rely on family help, announcing it on the eve of the Labour Party conference in Liverpool. The "Your First Home" plan will be open to first-time buyers in England who can produce a deposit of just 2.5%, with the government providing a loan equal to 20% of the value of a newly built home.

The announcement is aimed squarely at what Burnham described as buyers without the "bank of mum and dad" behind them — households for whom the traditional savings parents once handed to children are increasingly out of reach. Under the proposal, the equity loan would cover a fifth of the purchase price of a new-build property, dramatically reducing the amount a first-time buyer must find in cash.

Details remain incomplete, and Burnham indicated that some of the most important elements will be spelled out in next month's Budget. He confirmed there would be an initial interest-free period on the equity loan, a feature designed to delay the moment repayments begin and to give borrowers time to build equity before servicing costs start. Ministers have not yet confirmed whether buyers will face an age restriction, nor whether the value of the property will be capped — two questions that campaigners and industry analysts regard as decisive in determining who can actually benefit.

The scheme is not the first of its kind. It draws heavily on the Help to Buy programme, which was launched in 2013 by then-Chancellor George Osborne and later expanded a smaller initiative called FirstBuy aimed exclusively at first-time buyers. In its original form, Help to Buy allowed buyers to put down as little as 5% on a new home worth up to £600,000, with up to 20% of the cost met by a shared equity loan that was interest-free for the first five years. The first version of the programme ran until 2021, and a second iteration, which operated until 2023, narrowed access to first-time buyers and imposed regional price caps on eligible properties.

An official evaluation of Help to Buy found that more than 387,000 properties were purchased through the scheme, of which 328,000 were bought by first-time buyers. The report concluded, however, that while the scheme was effective in supporting people into home ownership in certain areas, it did not remove affordability barriers for first-time buyers in parts of the country that were already relatively expensive. That finding is widely seen as a warning for Burnham's proposal, which notably lacks a stated cap on property values.

Housing Secretary Angela Rayner said the new scheme would build on the lessons of previous efforts while retaining their benefits. The Home Builders Federation also welcomed the announcement, noting that the industry had long campaigned for action to improve access to home ownership. The trade body said its analysis showed a well-designed scheme could make a meaningful difference for households struggling to get onto the property ladder — a hint that the industry will be watching closely for the level of detail that arrives with the Budget.

The Conservatives have attacked the plans, with shadow housing secretary Katie Lam accusing Labour of wanting first-time buyers to take on even more debt to buy a limited supply of homes. She argued taxpayers would end up taking a stake in people's homes and picking up the bill for months afterwards, and warned that adding another levy on developers risked pushing up the price of new homes. Lam called the announcement a "colossal admission of failure", saying the government was making homes harder to build and then asking buyers to borrow more to pay for them. The Conservatives' own priorities are to scrap stamp duty, back British housebuilders and ensure homes are built in the places people actually want to live.

Timing is particularly significant given the government's own construction targets. Rayner told the BBC earlier this month that there was only a "slim chance" the government would meet its target of 1.5 million new homes in England by the next election, but insisted she was not giving it up. Data up to June this year suggested ministers are behind the pace of construction required to hit the goal, which housebuilders have previously warned is too optimistic. BBC Verify analysis has also found a decline in the number of new houses being built during Labour's first year in power — a fall that began under the previous government and has continued.

The equity loan itself will not be free to the public purse. Funding is expected to come from reprioritising existing budgets, while housing developers will contribute towards the running costs of the scheme — a model that critics argue is precisely what feeds into higher house prices.

The housing announcement formed part of a wider set of pre-conference pledges. Burnham, attending his first Labour Party conference as prime minister, said he wanted the week to set out a new direction for the country, arguing that the decade since Brexit had brought "too much drift and too much division". Another announcement committed the government to offering quicker access to a guaranteed job to young people receiving health or disability support, three months after they first claim benefits. The offer would begin next April, with the government covering 100% of wage costs for up to 25 hours a week for six months.

That guarantee is a significant tightening of existing rules. Currently, jobless young people aged 18 to 24 must have been claiming universal credit for 18 months before they can receive an offer under the government's job guarantee scheme. Conservative shadow work and pensions secretary Helen Whately said Labour should instead have reduced burdens on businesses to help disabled people find employment. She accused Burnham of reviving a Conservative scheme from after the pandemic, saying he "clearly has no new ideas".

For prospective first-time buyers, the immediate question is what arrives in the Budget. Without confirmation on age limits, property price caps and the precise design of the interest-free period, the scale of the scheme remains uncertain. What is clear is that ministers believe a fifth of the purchase price, secured on a 2.5% deposit, is the difference between owning a home and continuing to rent — and that the debate over whether that help is generous or simply another way of loading debt onto younger buyers is only beginning.