Government revamps Help to Buy with a new plan aimed at first-time buyers who have no 'Bank of Mum and Dad'

The Government plans to relaunch efforts to help new buyers on to the housing ladder with a scheme called Your First Home.

First-time buyers could get the keys to their home with just a 2.5 per cent deposit saved, in a move intended to help people who don't get financial support from the 'Bank of Mum and Dad'.

Prime Minister Andy Burnham said he was concerned by the high number of young people who have given up on home ownership because of high living costs, and wanted to change that.

A loan worth 20 per cent of their property’s value will be available to help pay for the purchase as part of the scheme.

This equity loan will initially be interest-free to ensure it remains affordable.

With the national average first-time home costing £230,000 according to Rightmove, this means that a buyer could put down a deposit of £5,750, and access a loan of up to £46,000 to help with the purchase.

Full details of the scheme will be set out at the Budget on October 28 by the Chancellor John Healey.

Fresh support: First-time buyers could get the keys to their home with just a 2.5 per cent deposit

Announcing the scheme as he arrived in Liverpool for Labour’s annual conference, the Prime Minister said: 'Too many young people are struggling with the cost of housing, with many giving up hope of ever having a home to call their own.

'So we will step in to help more first-time buyers on to the housing ladder, especially those who can’t call on the bank of mum and dad.

'Your First Home will get them the keys to their own front door, and give builders the confidence to deliver the high-quality new homes the country needs. This Labour government is bringing back hope for people across the country.'

The Government has also announced plans to give local leaders stronger powers to take possession of empty and derelict homes so they can be brought back into use.

Reforms to Empty Dwelling Management Orders are aimed at making the 300,000 empty homes across England available again.

The period of time a house must be empty before it can be taken over will be cut from two years to six months, and the backroom process which allows councils to seize properties through a tribunal system will be speeded up.

Meanwhile, funding for the Your First Home plan is expected to come from reprioritising existing Government budgets.

Housing developers will also pay towards the running costs of the scheme, which ministers hope will give the industry confidence to build new homes.

Housing Secretary Angela Rayner said: 'Your First Home will build on the lessons learned from previous schemes, while retaining the benefits.

'We’re delivering a new generation of equity loans in a Labour way, targeting support to those first-time buyers who need support the most and who don’t have the benefit of a large deposit from the bank of mum and dad.'

Shadow housing secretary Katie Lam said Labour was 'finally admitting that they will fail to deliver the homes they promised'.

She added: 'Now it wants first-time buyers to take on even more debt to afford the few homes that have been built, with taxpayers taking a stake in their homes and picking up the bill for months.

'Slapping another levy on developers risks pushing up the price of new homes too. This is a colossal admission of failure. This Labour Government is making homes harder to build, then asking buyers to borrow more to pay for them.'

Solange Chamberlain, chief executive of retail banking at NatWest Group, said: 'We welcome the Government's commitment to helping more people onto the property ladder and support the introduction of the new "Your First Home" scheme. 

'Making home ownership more accessible can create opportunities for aspiring buyers, unlock housing market activity and support economic growth across the UK.

'We already help thousands of customers buy their first home each year and stand ready to support the delivery of this scheme.'

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