BREAKING: The property market has remained in focus for the latest Autumn Budget, as the chancellor John Healey unveiled further details of the Your First Home Scheme and plans to support house building.
Delivering the latest annual statement in the House of Commons this afternoon and his first Budget, Healey confirmed speculation of tax increases to the banking sector by announcing an increase in corporation tax surcharges by 3%, which will be used to pay for “increased energy cost support”.
Helping first time buyers onto the property ladder, the chancellor also revealed further details on the government’s Your First Home Scheme and the introduction of a First Time Buyer ISA.
Healey said: “For every young person who is working hard, saving what they can, and dreaming of their first home, I’m taking action. I’m announcing that a First Time Buyer ISA will replace the Lifetime ISA.”
The chancellor announced changes in penalty rules for the ISA meaning “if the home you want costs more than the limit, you will get back at least what you put in”.
He continued: “And I’m going further. From next Spring, a new scheme for first tme buyers who don’t have the bank of mum and dad. Your First Home Scheme, which I’m funding today with £4.7 million of government backed lending.”
Eligible buyers will be able to purchase a home using a deposit of at least 2.5% of the purchase price, a repayment mortgage from a participating lender and a government equity loan worth 20% of the purchase price, interest free for five years, rising to 1.5% in year six and 3% from year seven.
The scheme is expected to open for applications in February 2027. More information about eligible homes, participating developers and lenders, and how to apply will be published before applications open.
Developer participation fees, based on final sale price, will apply to properties sold using the scheme and will go towards supporting the running costs of the scheme.
To help ensure the scheme remains accessible to small and medium-sized developers, fees will increase gradually according to the number of homes sold through the scheme each year.
Alongside this, it was confirmed pre-Budget the threshold for eligibility for first-time buyers will be £110,000 combined income outside of London and £140,000 in the capital, to curb potential exclusion of couples that work within the public sector.
An additional £1.5 billion is being invested into social and affordable housing in England over the next 10 years, Healey revealed, along with a halt on any major changes to building regulations to aid the increase in homes being built across the UK, with an exception on critical safety regulations.
And to encourage the building of more council houses, Healey stated cheaper borrowing for councils will be extended and all land sold to social housing providers will be VAT free.
“The Conservatives sold off our council houses, Labour is building them back,” he said.
In a bid to cut red tape and support businesses, the chancellor said the government will change regulations and cut “pointless paperwork” to save businesses up to £800 million, with a goal to cut regulation by 25% by the end of the parliamentary term.
Despite strong speculation, Healey squashed rumours that stamp duty would be reformed or abolished in the Autumn Budget, with no mention of any changes to SDLT, much to the disappointment of property experts.
