Rishi Sunak will today announce a new package of support aimed at helping people get onto the housing ladder.
Acknowledging that it has become harder to buy a home under the Tories, Sunak is set to reveal a £1bn scheme offering government-backed mortgages, allowing first-time buyers to purchase homes with just a 5% deposit.
This plan, modelled on the recently closed Help to Buy scheme, will be applicable for homes valued under £400,000. in its previous iteration, the scheme had a threshold of £250,000 outside London and £450,000 within the capital.
Sunak will also propose the permanent abolition of stamp duty for first-time buyers purchasing properties up to £425,000. He stated that this initiative is part of the Conservatives’ vision to build an “ownership society” where more people can achieve the security and pride of home ownership.
In a BBC interview ahead of the manifesto launch, Sunak said he recognised the increasing difficulty for people to buy homes in recent years and emphasised the importance of supporting young people to save for deposits.
The proposed “new and improved” Help to Buy scheme will offer first-time buyers a 20% government equity loan for new-build properties, enabling purchases with a 5% deposit. The scheme, set to run for three years, is expected to help hundreds of thousands of families access mortgage finance on affordable terms. Interest on the government equity portion will not be payable for the first five years, with developers contributing a quarter of the equity loan costs.
Additionally, the Prime Minister will announce plans to scrap capital gains tax for landlords who sell their properties to tenants.
Labour has also outlined measures to support first-time buyers, proposing to make the current mortgage guarantee scheme permanent. This scheme, due to end in June next year, sees the government acting as guarantor for part of a loan. Labour claims their plan will help over 80,000 young people get onto the housing ladder within the next five years.
