Healey to make more first-time buyers eligible for help

Chancellor John Healey (pictured) has changed the income caps for first-time buyers to ensure more will be eligible for the new Your First Home scheme.

He has raised the maximum thresholds potential homeowners can earn before they qualify for help, to be announced in Wednesday’s Budget, The Times reports.

The original proposal was for a £90,000 household income cap outside London, rising to £110,000 in the Capital. But now it is understood the caps will be set at £110,000 and £140,000 respectively.

Value cap

Other parts of the scheme which include help with a 2% deposit on a new-build with a 20% equity loan from the Government, remain the same. There is expected to be a cap on the value of the home that can be purchased, as there was under Help to Buy.

Neil Jefferson, Chief Executive at the Home Builders Federation, said: “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.

“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.”

Shut out

Mortgage brokers had expressed concerns that the Your First Home income caps could shut out high earning couples.

Research suggested that if two paramedics in London each earned the reported average salary of over £60,000, their combined household income would be more than £121,000 – exceeding the proposed £110,000 cap.