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England first-time buyer loans may cap incomes at £110,000, £140,000 in London
The BBC, citing The Times, reports the U.K. government is expected to set income caps of £110,000 outside London and £140,000 in London for England’s Your First Home equity-loan scheme.
- New headline Was: “Earnings limit of up to £140K for first-time buyers loan scheme”
- Our desk filed its story
The U.K. government is expected to let households earning up to £110,000 apply for a new first-time buyer loan scheme in England, with a higher £140,000 earnings limit for purchases in London, the BBC reported, citing The Times1.
The Your First Home scheme would offer government-backed equity loans worth 20% of new-build homes bought from participating developers, with an initial interest-free period, and is designed to allow deposits as low as 2.5%, the BBC said1. Details, including the salary caps, are due to be confirmed at next week’s Budget1.
Prime Minister Andy Burnham, unveiling the scheme at last month’s Labour conference, said it would focus on people who “really need support,” the BBC reported1. Earlier first-time buyer programs did not restrict eligibility by income and drew criticism for helping relatively wealthy households borrow more, the BBC said1. The Times reported that ministers first planned caps of £90,000 outside London and £110,000 in the capital, then concluded those levels would shut out too many middle-earning couples such as teachers and nurses1.
The government has argued the scheme will help boost housebuilding after ministers conceded they are set to miss a target of 1.5 million homes in England by the next election, the BBC said1. Labour said the loans would be funded within existing budgets but has not said which other spending would be cut; developers in the scheme would also be asked to contribute to running costs1. Like the coalition-era Help to Buy program, the loans would be equity loans tied to changes in property value1. That earlier scheme, which ran from 2013 to 2021, let buyers put down a 5% deposit on a newly built home worth up to £600,000, with up to 20% funded by a shared equity loan that was interest-free for five years; a 2021–2023 version limited access to first-time buyers and used regional price caps1.