Middle earners to benefit from Help to Buy expansion

John Healey is poised to make the government’s revived Help to Buy scheme more generous in a boost to middle-earners. The chancellor was set to exclude households earning more than £90,000 outside London and £110,000 in the capital from the “Your First Home” scheme. Most commented 1 Where’s Marie Curie? GCSE science ‘fails to credit women’ Science 232 comments 2 US withdraws diplomats from Saudi Arabia amid deadly Houthi attacks US news 202 comments 3 Alan Thornett obituary: union leader nicknamed ‘the Mole’ Obituaries 97 comments 4 MI5 spied on NHS founder Nye Bevan for decades History 87 comments 5 Times letters: Failure to protect the elderly in care homes Letters to the Editor 64 comments It offers first time buyers a 20 per cent equity loan to help them buy a new-build home, with an initial interest free payment and a minimum deposit requirement of just 2.5 per cent. Top stories 1 Tripsnacking? Finally a travel trend I can get on board with Advice However, the initial earnings cap would have meant young couples with relatively modest incomes would have been unable to access the initiative. The median pay for a teacher is £51,048 and for a nurse the figure is £44,053. Politics newsletter Get our daily insider’s guide to Westminster, plus a rundown of PMQs every Wednesday. Sign up with one click You’ve successfully signed up to the Politics newsletter Explore our newsletters An error occurred. Please use the link below. Politics newsletter Explore our newsletters The Times was told that Healey recognised these concerns and decided to instead set the cap at £110,000 outside London and £140,000 in the capital. Advertisement The move is expected to open up the scheme to tens of thousands of additional first-time buyers and incentivise developers to push forward with new sites, helping the government to meet its target of building 1.5 million new homes by the end of the parliament. Top stories 1 High street banks are on borrowed time Saving & Investing 2 Belgium’s most stylish autumn weekend break — and it’s not Bruges Belgium Under the plan, announced by Andy Burnham last month, first-time buyers in England will be able to purchase a new home with a much reduced deposit, allowing many more buyers to get on the property ladder. The scheme is modelled on Help to Buy, which was launched by George Osborne in 2013 and ran until 2022. Under the proposal buyers would put down a 2.5 per cent deposit, with the government taking a further 20 per cent equity stake in the new build property’s value. This would be in the form of a loan that would be subject to an interest-free period for those borrowing under the scheme. The previous Help to Buy scheme also offered an equity loan Alamy However, unlike Help to Buy, Labour’s scheme will only be eligible to households under a defined household income. This led to criticism that it could end up excluding many middle income couples who were struggling to get on the housing ladder, prompting the change of heart from the government. Advertisement As with Help to Buy, the new scheme is expected to include a cap on the value of property that can be bought. Between 2013 and 2021, a blanket maximum property value of £600,000 was applied. This was changed in the final two years of the scheme to 1.5 times the average first-time buyer regional property price, meaning it varied from £186,100 in the North East to £600,000 in London. The purchase price threshold for the new scheme is expected to be announced at the budget. The decision to revive Help to Buy came after ministers privately concluded that the government’s existing reforms, such as cutting planning red tape , were not enough to kick-start housebuilding. Last month it emerged that planning approvals for new homes in England had fallen to the lowest level in more than a decade, with housebuilders warning that rising costs meant that many projects were unviable. Just 45,315 homes received planning approval in the second quarter of the year, while the 214,515 homes approved in the year to quarter two was 8 per cent down on the previous year and 36 per cent below their 2017 peak. Advertisement The annual total represents just 58 per cent of the 370,000 homes a year needed to hit the government’s 1.5 million new home target. Neil Jefferson, chief executive of the Home Builders Federation, said that a lack of effective demand was one of the “biggest constraints on housing supply”. “Your First Home has the potential to help more people onto the housing ladder and support the increased delivery of much-needed homes, but its success will depend on the detail to be announced at the budget,” he said. “Government must ensure that income and house price caps, developer contributions and the scale and duration of the scheme are carefully designed so it is attractive to customers and accessible to builders of all sizes across the country. “We also want to see action to reduce the cumulative burden of taxes and policy costs on development — without this, large parts of the country will remain unviable for housing delivery.”