UK announces Your First Home loan scheme for buyers

The UK government has announced Your First Home, an equity-loan scheme intended to help eligible first-time buyers purchase new-build homes, with a 2.5% deposit and government support of up to 20% of a property’s value. Housebuilder shares rose after the announcement on September 28, while the scheme’s full terms remain due at the October 28 Budget. The government says the programme will be limited to first-time buyers buying homes from developers that participate. An initial interest-free period is planned, and developers are expected to contribute to costs. Details including income and local property-price caps, repayment terms and implementation arrangements have not yet been set out in the supplied announcements. The share gains varied by company and by the time prices were reported. Barratt Redrow, Persimmon, Taylor Wimpey, Vistry and other listed builders rose during trading on September 28. The rally followed the scheme announcement, but does not establish how the policy will affect sales, construction or company earnings. Analysts have offered estimates of possible effects.