Question to the Department for Levelling Up, Housing & Communities:

To ask the Secretary of State for Housing, Communities and Local Government, what Government support is available to help first-time buyers obtain a deposit for a home.

The Government is committed to supporting first time buyers onto the housing ladder and recognises the challenges faced by prospective homeowners to secure a sufficient deposit. Many creditworthy homebuyers can afford regular repayments but not high deposits.

Help to Buy: Equity Loan helps address this by allowing people to buy with deposits as low as 5 per cent. The Government provides a loan of up to 20 per cent of the property’s value (40 per cent in London) which grants the purchaser to access to lower cost 75 per cent LTV mortgages. Furthermore, there are no interest fee payments for first 5 years, easing financial pressures in the early years of home ownership. Under the Help to Buy Equity Loan scheme, the homeowner owns 100 per cent of the property, and the Government has an equity share of up to 20 per cent (40 per cent in London) of the home.

Since the launch of the Help to Buy: Equity Loan scheme (1 April 2013 to 30 June 2020), over 278,000 properties have been bought with an equity loan of which 228,896 (82 per cent) were bought by first time buyers. Whilst the current Help to Buy: Equity Loan scheme is closing on 31 March 2021 it will be replaced from 1 April 2021 by a new Help to Buy scheme specifically targeted at first time buyers, with regional property caps (based on average first time prices) that will run for two years until March 2023.

In addition to the Help to Buy: Equity Loan scheme, the Government helps first time buyers to save. First time buyers who opened a Help to Buy: ISA before 30 November 2019 can save through the scheme and will be eligible for a Government bonus of up to £3000. The bonus size is calculated as 25 per cent of the balance in the buyer's Help to Buy: ISA (capped at £3000). The bonus is calculated and paid when the home is purchased. Since the scheme launched in 2015, 336,884 property completions have been supported through the scheme.

Moreover, in April 2017 the Government introduced the Lifetime ISA, which is a long-term savings product intended to support younger people saving for their first home, or for later life. Adults aged 18 to 39 can open a Lifetime ISA, and can save up to £4,000 into their account each year until their 50th birthday, receiving a 25 per cent Government bonus on those savings.