UK to confirm homebuying loan scheme in October budget

The British government announced on Saturday that its new equity loan scheme, called "Your First Home," will be confirmed in the upcoming October budget. The policy aims to stimulate economic growth by boosting demand for house building and assisting first-time buyers. The scheme, a revival of the "Help to Buy" scheme, targets those who can make a 2.5% deposit, backed by a government-backed equity loan of up to 20% for first-time buyers.

Home buyers can access an equity loan of up to 20% of the market value of an eligible new-build property, interest-free for five years. The loan must be repaid in full upon selling the property, within 25 years or in line with the main mortgage. Buyers can purchase a new-build property with a mortgage of 75% of the property's value, capped at £600,000.

The scheme will also set household income and local property price caps to ensure support is targeted towards those in need. Housing developers will be required to contribute when joining the scheme to help cover costs. The "Your First Home" scheme is a revival of the "Help to Buy" scheme that ran from 2013 to 2022 and helped over a third of a million people purchase new-build homes.