"Your First Home": Burnham puts 20% equity loan behind England's first-time buyers

Andy Burnham has unveiled a government plan to help young people buy their first home, promising a state-backed loan worth a fifth of a new-build property's value for buyers who can put down just 2.5%. The prime minister made the announcement in Liverpool on the eve of his first Labour Party conference since taking office, framing housing as the central test of his new government's economic credibility.

Under the "Your First Home" scheme, as described by Burnham, first-time buyers in England would be eligible for an equity loan covering 20% of the value of a newly built home, on top of a minimum deposit of 2.5%. Burnham said the measure was aimed squarely at those without help from the "bank of mum and dad" — the shorthand for parents and relatives who help their children onto the property market — as well as at buyers who have simply given up hope of ever owning a home.

The equity loan would carry an initial interest-free period, with the precise terms — including how long that period would last — expected to be confirmed in next month's Budget. Ministers have not yet settled whether the scheme will include an age limit or a maximum purchase price, two details that proved decisive in shaping earlier attempts to widen home ownership, and both of which will shape how generous the final design turns out to be.

The prime minister said the intervention would also give developers the "confidence to deliver" the high-quality new homes the country needs. Funding is expected to come from reprioritising existing budgets rather than a fresh spending commitment, although housebuilders will contribute towards the running costs of the scheme — a detail that critics argue simply risks being passed on to buyers in the form of higher prices.

The Conservatives were quick to attack the plan. Shadow housing secretary Katie Lam said Labour wanted first-time buyers to "take on even more debt" to afford the limited number of homes being built, and that taxpayers would end up holding "a stake in their homes" while picking up the bill for months. She also warned that imposing another levy on developers risked pushing up the price of new homes — "a colossal admission of failure", in her view, in a government that she said was making homes harder to build and then asking buyers to borrow more to pay for them.

The proposal has clear precedent. The design echoes Help to Buy, introduced in 2013 by then-Chancellor George Osborne, which itself expanded an earlier scheme called FirstBuy aimed solely at first-time buyers. The first version allowed any purchaser to put down a 5% deposit 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. That version ran until 2021; a second, tighter iteration limited access to first-time buyers, introduced regional price caps and ran until 2023.

Official evaluations of Help to Buy have been mixed in a way that matters for Burnham's scheme. A government review found that more than 387,000 properties were purchased with its help, including 328,000 by first-time buyers — a substantial contribution to ownership numbers. But the report concluded the programme was effective in some areas while failing to remove affordability barriers for first-time buyers in places that were already relatively expensive, a warning about designing a scheme that helps supply-constrained markets without doing anything about the underlying cost of land and construction.

Housing secretary Angela Rayner said Your First Home would "build on the lessons" of previous schemes while retaining their benefits. The Home Builders Federation, which has long pressed for action on home ownership, welcomed the announcement, saying its analysis shows a well-designed scheme can make a meaningful difference for households struggling to get onto the property ladder — while stopping short of endorsing the specific 20% figure.

The announcement lands against a sobering statistical backdrop. Rayner told the BBC earlier this month that there was only a "slim chance" the government would hit its target of building 1.5m homes in England before the next election, adding that she was "not giving it up". Data up to June indicated the country is behind the pace of construction required to meet that goal, which industry figures have previously described as too optimistic. BBC Verify analysis also found that the number of new homes being built fell during Labour's first year in power, extending a decline that had begun under the previous government.

Burnham said he wanted the conference to be a moment of direction-setting after what he described as a decade of "drift" and "division" since Brexit, a period he said needed drawing a line under. Alongside housing, the government announced a second pre-conference measure: young people receiving health or disability support would get quicker access to a guaranteed job, with an offer coming three months after they first claim benefits rather than the current wait of 18 months on universal credit for jobless 18-to-24-year-olds.

The guarantee will start next April, with the government covering 100% of an employer's wage costs for up to 25 hours a week for six months. Conservative shadow work and pensions secretary Helen Whately said Labour should instead have reduced burdens on businesses to help get disabled people into work, accusing Burnham of reviving a Conservative-era post-pandemic scheme. "Andy Burnham clearly has no new ideas," she said.

For Housing Secretary Rayner, the immediate tests will be the details in the Budget. The interest-free duration, the treatment of existing homeowners, the funding mechanism, and whether any cap is placed on the value of homes eligible for support will determine whether Your First Home avoids the fate of its predecessors — helping numbers of buyers in some regions while leaving the least affordable places, where first-time buyers are most concentrated, no better off.