Your First Home: Burnham unveils equity loan plan to get first-time buyers on the property ladder

Prime Minister Andy Burnham has unveiled a government-backed scheme designed to help first-time buyers in England purchase a new home, announcing it in Liverpool on the eve of his first Labour Party conference since taking office. The policy, called "Your First Home", is intended to ease the sharpest barrier facing younger buyers today: the size of the deposit required to enter the property market.

Under the proposal, first-time buyers would need to put down a deposit of just 2.5% of a new build's value, with the government providing a loan covering 20% of the property's price. Burnham said the scheme was aimed squarely at people without help from the "bank of mum and dad" — those priced out of homeownership by borrowing costs and savings gaps that have widened sharply over the past decade.

The equity loan would carry an initial interest-free period, though Burnham declined to set out its length. He indicated that further specifics, including the mechanics of the interest charged after that period ends, would be set out in next month's Budget. Funding is expected to be drawn from existing departmental budgets that are being reprioritised, with housebuilders contributing towards the running costs of the programme.

Ministers have not confirmed whether buyers must fall within a specific age range, nor whether a maximum property value will be enforced. Those two design details are likely to determine whether the scheme meaningfully widens access to homeownership or simply subsidises purchases that buyers could already afford. The absence of a confirmed price cap in particular leaves open the possibility that the largest equity loans, and therefore the greatest taxpayer exposure, go to those buying in the country's most expensive markets.

The policy echoes initiatives run by previous administrations. It is closest in design to Help to Buy, launched in 2013 by then-Chancellor George Osborne, which in turn expanded an earlier scheme called FirstBuy that was restricted solely to first-time buyers. Help to Buy initially allowed any purchaser to put down a 5% deposit on a newly built home valued at 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 remained open until 2021. A second iteration, which ran until 2023, narrowed eligibility to first-time buyers only and introduced regional price caps governing the value of properties eligible for support. Officials have been studying that record closely as they design the new scheme.

A government evaluation of Help to Buy found that more than 387,000 properties were purchased through it, of which 328,000 were bought by first-time buyers. The report concluded that the scheme was effective in supporting people into homeownership in some areas, but warned it had not removed affordability barriers for first-time buyers in regions that were already relatively expensive — a caveat that will be central to judging whether the new policy succeeds.

Housing Secretary Angela Rayner said "Your First Home" would draw on the lessons of earlier schemes while retaining what worked about them. The Home Builders Federation, the trade body for developers, welcomed the announcement, saying it had long pressed for action to improve access to homeownership. It added that its own analysis shows a well-designed scheme can make a meaningful difference for households struggling to get onto the property ladder.

The Conservatives have attacked the plan from several directions. Katie Lam, the shadow housing secretary, argued the policy would push first-time buyers further into debt to buy a limited supply of new homes, with taxpayers taking a stake in people's properties and picking up the bill for months afterwards. She also warned that adding a levy on developers risks pushing up the price of new homes, calling it a "colossal admission of failure" in which government is making homes harder to build and then asking buyers to borrow more to pay for them.

In place of the equity loan, the Conservatives favour scrapping stamp duty, backing British housebuilders, and ensuring homes are constructed in the places people actually want to live — a package aimed at boosting supply rather than subsidising demand.

The announcement comes against a backdrop of concern over construction rates. Rayner said earlier this month there was only a "slim chance" the government would meet its target of building 1.5m homes in England before the next election, while insisting she was "not giving it up". Data to June suggested ministers are behind the pace required, and housebuilders have previously warned the target is too optimistic. BBC Verify analysis found the number of new homes being built declined during Labour's first year in government, extending a downward trend that began under the Conservatives.

Burnham framed the housing measures as part of a broader resetting of the party's direction. Arriving in Liverpool, he said he wanted the conference to be a "really important week" setting out a new direction for the country, arguing that the decade since Brexit had brought "too much drift" and "too much division" that needed to be brought to an end.

A second pre-conference announcement offered faster access to a guaranteed job for young people receiving health or disability support. Instead of waiting 18 months on universal credit — the current rule for jobless 18-to-24-year-olds under the job guarantee — an offer would come three months after a claimant first applies for benefits, with the scheme starting next April. The government would cover 100% of wage costs for up to 25 hours a week for six months.

Conservative shadow work and pensions secretary Helen Whately said Labour should have reduced burdens on business to help disabled people find work, accusing the party of reviving a Conservative post-pandemic scheme and leaving Burnham with "no new ideas".

With the Budget now the key milestone for the loan's interest terms, eligibility limits and overall cost to the public, the success of "Your First Home" will hinge on whether it reaches buyers in high-price regions — the exact failure identified in the Help to Buy evaluation.