Households earning more than a combined £110,000 outside London, or £140,000 inside the capital, will be locked out of the revived Help to Buy scheme, the Autumn Budget confirmed. The £4.7bn government-backed 'Your First Home' scheme offers equity loans to first-time buyers in England.
Chancellor John Healey announced that from next spring, first-time buyers who "don't have the bank of mum and dad behind them" will be able to draw on a government-backed equity loan through the 'Your First Home' scheme. He said it will "help around 70,000 households in England to take their first step onto the housing ladder and support the delivery of an estimated 20,000 new homes", offering equity loans to those who "would not otherwise be in a position to purchase a residential property."
The equity loan is worth 20 per cent of the value of a new-build property bought from participating developers, with an initial interest-free period and a minimum deposit of just 2.5 per cent. Pre-registration opens by the end of December, full applications begin in February, and the first loans are due to be issued from April 2027.
The income caps were relaxed from limits previously reported: Healey had been expected to exclude households earning over £90,000 outside London and £110,000 in the capital, but instead set the thresholds at £110,000 and £140,000.
Shares in London-listed housebuilders jumped on the announcement, with Vistry gaining nearly five per cent and Berkeley, Barratt and Bellway also rising. Housebuilders have welcomed the scheme after struggling in recent months with soaring mortgage rates and rising building costs. Healey also promised housebuilders he would not impose further red tape for the rest of this parliament. He said: "To get more homes built, I'm drawing the line on constant changes to building regulations: No major changes to building regulations in this Parliament, except where critical for safety. And I am removing biodiversity requirements for more brownfield sites." All land sold to social housing providers will be VAT-free, and an additional £1.5bn was committed to the social and affordable housing programme.
The scheme, originally unveiled by Andy Burnham ahead of the Labour Party conference in September, is modelled on Help to Buy, the George Osborne-era programme that ran from 2013 to 2022. FTSE 250 housebuilder Bellway had warned the revived scheme could further slow the housing market in the near term by encouraging buyers to delay decisions.
Analysis
Why This Matters
- The income caps decide who can use the scheme: couples earning over £110,000 combined outside London and £140,000 in London are excluded, which shapes how far middle-earning households can access government help.
- The scheme is tied to housebuilding: it is meant to support delivery of an estimated 20,000 new homes, and its detail will affect housebuilders' sales pipelines at a time they say demand is weak.
- The rollout is timed: pre-registration by the end of December, full applications in February, and the first loans from April 2027, so the effects will be measured over the next year.
Background
The 'Your First Home' scheme is modelled on Help to Buy, the government equity loan programme introduced under George Osborne in 2013 during the Conservative-Liberal Democrat coalition and which ran until 2022. It was originally unveiled by Andy Burnham ahead of the Labour Party conference in September. Healey first floated stricter income caps of £90,000 outside London and £110,000 in the capital before rolling them back last Thursday to the higher thresholds confirmed in the Budget.
Key Perspectives
Chancellor John Healey: says the scheme will help first-time buyers who "don't have the bank of mum and dad behind them", and promises no major changes to building regulations this Parliament except where critical for safety.
Housebuilders: have welcomed the scheme after struggling with demand caused by soaring mortgage rates and rising building costs; their shares rose on the announcement.
Bellway: warned the revived scheme could further slow the housing market in the near term by encouraging housebuyers to delay purchasing decisions.
What to Watch
- Whether the relaxed income caps hold, given Healey already rolled back stricter limits ahead of the Budget.
- The pre-registration opening at the end of December and the first loan issuance in April 2027 as the scheme's delivery milestones.
- Housebuilder share performance and sales data in coming months for signs that buyers are waiting for the scheme rather than purchasing now.
Checked
12 claims in this story checked against 1 source: 9 supported.
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- Partly supportedThe revived scheme excludes households earning more than £110,000 outside London or £140,000 in London.City AM: “First-time buyers earning over a combined £110,000 outside London will be locked out of benefiting from the £4.7bn government-backed funding providing equity loans in the Your First Home Scheme, and £140,000 inside the capital.”
- SupportedThe scheme is £4.7bn in government-backed funding.City AM: “First-time buyers earning over a combined £110,000 outside London will be locked out of benefiting from the £4.7bn government-backed funding providing equity loans in the Your First Home Scheme”
- Partly supportedPre-registration opens in December.City AM: “The scheme will open for pre-registration by the end of December and full applications from February next year”
- SupportedHealey said buyers “don't have the bank of mum and dad behind them”.City AM: “The Chancellor said that from next Spring, first-time buyers who “don’t have the bank of mum and dad behind them” will benefit from an equity loan”
- SupportedThe scheme will help around 70,000 households onto the housing ladder and support an estimated 20,000 new homes.City AM: “The scheme will “help around 70,000 households in England to take their first step onto the housing ladder and support the delivery of an estimated 20,000 new homes”.”
- SupportedThe scheme offers equity loans to people who “would not otherwise be in a position to purchase a residential property.”City AM: “The proposal will provide equity loans to those who “would not otherwise be in a position to purchase a residential property.””
- SupportedHealey said: “To get more homes built, I'm drawing the line on constant changes to building regulations: No major changes to building regulations in this Parliament, except where critical for safety. And I am removing biodiversity requirements for more brownfield sites.”City AM: “He said: “To get more homes built, I’m drawing the line on constant changes to building regulations: No major changes to building regulations in this Parliament, except where critical for safety. And I am removing biodiversity requirements for more brownfield sites.””
- SupportedThe equity loan is 20 per cent of the value of a participating developer's new-build property.City AM: “The equity loan scheme offers first-time buyers in England a government-backed equity loan worth 20 per cent of the value of a new-build property bought from developers participating in the scheme”
- SupportedThe minimum deposit is 2.5 per cent.City AM: “designed to back people purchasing a home with a minimum deposit requirement of only 2.5 per cent.”
- SupportedFull applications begin in February and the first loans are due to be issued from April 2027.City AM: “The scheme will open for pre-registration by the end of December and full applications from February next year, with the first loans issued from April 2027.”
- Partly supportedHealey promised housebuilders there would be no further red tape for the rest of this parliament.City AM: “Alongside the ‘Your First Home’ scheme, Healey promised housebuilders that he won’t hamper them with any more red tape for the rest of this parliament, unless necessary.”
- SupportedAll land sold to social housing providers will be VAT-free.City AM: “The Chancellor announced that all land sold to social housing providers will be VAT-free.”