Burnham unveils "Your First Home" equity loan plan in bid to revive first-time buyer numbers

Prime Minister Andy Burnham has unveiled a Government-backed lending scheme designed to help young adults in England buy their first home, unveiling it on the eve of the Labour Party conference in Liverpool. The policy, called "Your First Home", was presented as a targeted answer to a housing market that ministers acknowledge has left a generation priced out of ownership.

Under the proposal, eligible first-time buyers would need to put down a deposit of just 2.5% of the property's value, with the Government supplying a loan worth 20% of the price of a new-build home. Burnham said the scheme would be aimed squarely at those without help from the "bank of mum and dad" — the family assistance that continues to divide who can and cannot get a foothold on the housing ladder.

The equity loan would carry an initial interest-free period, though Burnham stopped short of committing to how long that would last, saying further details would be set out in next month's Budget. Ministers have also declined to confirm whether the scheme will include an age limit for buyers or a maximum property value, two design details that observers say will be decisive in determining whether the policy reaches the households it is intended to help.

On funding, the Government said money would be found by reprioritising existing budgets, while housebuilders would contribute towards the running costs of the scheme. That arrangement drew immediate criticism from the opposition, who argued it amounts to a new levy on developers that could be passed on through higher prices.

Burnham defended the plan, saying too many young people were struggling with the cost of housing and had begun to give up hope of ever owning a home. "So we will step in to help more first-time buyers on to the housing ladder," he told delegates. He also argued the scheme would give builders the "confidence to deliver the high-quality new homes the country needs", framing the intervention as a supply-side measure as much as a demand-side one.

The proposal is closely modelled on the Help to Buy scheme, which was launched in 2013 by then-Chancellor George Osborne during the Conservative-Liberal Democrat coalition. Help to Buy expanded an earlier initiative called FirstBuy, which had been restricted to first-time buyers, and initially allowed purchasers to put down a deposit of 5% on a newly built home worth up to £600,000, with up to 20% of the cost covered by a shared equity loan that was interest-free for the first five years.

The first version of the programme ran until 2021. A second iteration, which remained open until 2023, limited access to first-time buyers and introduced regional price caps on the properties that could be purchased. A government evaluation of the scheme found that more than 387,000 properties were bought through it, of which 328,000 were purchased by first-time buyers.

The evaluation's conclusion was more equivocal, however, judging that 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" — a warning Burnham's team will have to grapple with as it designs the successor scheme.

Housing Secretary Angela Rayner said "Your First Home" would "build on the lessons learned from previous schemes, while retaining the benefits", signalling that ministers are aware of the mixed verdict on their predecessor. The Home Builders Federation, the industry body representing housebuilders, broadly welcomed the announcement and said it had "long called for action to improve access to home ownership". The HBF added: "Our analysis shows a well-designed scheme can make a meaningful difference for households struggling to get on to the property ladder."

The Conservatives were more sceptical. 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", and said taxpayers would end up taking "a stake in their homes" and "picking up the bill for months". On the developer contribution, she said: "Slapping another levy on developers risks pushing up the price of new homes too." Lam called the policy "a colossal admission of failure", arguing that the Government was making homes harder to build and then asking buyers to borrow more to pay for them.

Setting out the opposition's alternative, Lam said the Conservatives want to scrap stamp duty, "back British house builders" and ensure houses are "built in the places that people actually want to live". The Tory criticism lands against a backdrop of construction figures that have disappointed across successive governments. Rayner told the BBC earlier this month there was only a "slim chance" the Government would hit its target of building 1.5m homes in England by the next election, while insisting she is "not giving it up". Data published up to June suggests the Government is behind the pace of construction required to meet that goal, a target housebuilders have previously warned was too optimistic, and BBC Verify analysis has found the number of new homes being built declined during Labour's first year in power — extending a fall that began under the Conservatives.

The housing announcement came as Burnham arrived in Liverpool for his first party conference as prime minister. He said he wanted the week to set out "a new direction for the country", arguing that the past decade since Brexit had brought "too much drift, too much division".

Conference week brought a second policy pledge aimed at young people: a guarantee of faster access to a job for those receiving health or disability support. Instead of waiting 18 months on universal credit before qualifying for an offer — the current rule for jobless 18-to-24-year-olds — the new approach would trigger a guaranteed job offer three months after a young person starts claiming benefits. The measure is due to begin next April, with the Government covering 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 the "burdens" on businesses to help get disabled people into employment. Instead, she said, ministers were reviving a Conservative post-pandemic scheme and that "Andy Burnham clearly has no new ideas".