First-time buyers will be able to get onto the housing ladder with a deposit of just 2.5% under a new Labour Government scheme announced this weekend.

The new ‘Your First Home‘ scheme will offer eligible first-time buyers purchasing a new-build home a government-backed equity loan worth 20% of the property, alongside an initial interest-free period.

The Government says the scheme could save buyers hundreds of pounds a month compared with taking out a 95% mortgage, while dramatically reducing the amount they need to save before buying. Household income and local property-price caps will ensure the scheme is targeted, with the full details to be confirmed at next month’s Budget.

It comes alongside Labour’s wider drive to build over a million more homes, including the £39 billion Social & Affordable Homes Programme, planning reforms and measures to get councils building again. The affordable homes programme alone could support around 300,000 new homes, with at least 60% expected to be for social rent.

Luke Myer MP has consistently pushed for action to help young people onto the housing ladder – in his first months in Parliament, he warned ministers that “young families on Teesside are desperate to get on the housing ladder” and called on the Government to “get Britain building again” (Hansard, December 2024).

Labour Governments have always stood with first-time buyers, with the Wilson/Callaghan governments helping lower-income buyers with cheaper mortgages and interest-free loans towards deposits in the 1960s and 1970s, and the Blair/Brown governments expanding shared-equity schemes through HomeBuy in the 2000s.

Luke Myer MP said:

“Beth and I would never have been able to buy our first home without 5% deposits, and I’m so pleased that this Labour Government is introducing 2.5% deposits for the next generation. This will make a huge difference for lots of young people.

“It means less to save upfront, and lower monthly costs once you’ve got the keys. Owning your own home shouldn’t depend on whether your parents can afford to give you tens of thousands of pounds. If you work hard and save, you deserve a fair shot at getting on the housing ladder.”