Households earning more than a combined £110,000 are set to be excluded from the revived Help to Buy scheme, the Autumn Budget confirmed.

First-time buyers earning over a combined £110,000 outside London will be locked out of benefiting from the £4.7bn government-backed funding providing equity loans in the Your First Home Scheme, and £140,000 inside the capital. 

The Chancellor said that from next Spring, first-time buyers who “don’t have the bank of mum and dad behind them” will benefit from an equity loan in the ‘Your First Home’ scheme with the government-backed lending.

The scheme will “help around 70,000 households in England to take their first step onto the housing ladder and support the delivery of an estimated 20,000 new homes”. 

The proposal will provide equity loans to those who “would not otherwise be in a position to purchase a residential property.” 

Housebuilding shares jump

Shares in London’s listed housebuilders jumped on Wednesday after John Healey said a scheme will give first-time buyers access to £4.7bn of government-backed lending to help them get onto the property ladder.

Housebuilders have welcomed the scheme, as they’ve struggled in recent months after soaring mortgage rates and rising building costs caused by the Iran war have stifled demand for new homes.

Beleaguered housebuilder Vistry jumped nearly five per cent, while Berkeley, Barratt, and Bellway also gained while the Chancellor spoke at the despatch box.

Alongside the ‘Your First Home’ scheme, Healey promised housebuilders that he won’t hamper them with any more red tape for the rest of this parliament, unless necessary.

The Chancellor announced that all land sold to social housing providers will be VAT-free. He also committed an additional £1.5bn to the social and affordable housing programme.

He said: “To get more homes built, I’m drawing the line on constant changes to building regulations: No major changes to building regulations in this Parliament, except where critical for safety. And I am removing biodiversity requirements for more brownfield sites.”

The equity loan scheme offers first-time buyers in England a government-backed equity loan worth 20 per cent of the value of a new-build property bought from developers participating in the scheme, with an initial interest-free period, designed to back people purchasing a home with a minimum deposit requirement of only 2.5 per cent.

Scheme modelled on Osborne’s ‘Help to Buy’

The programme, originally unveiled by Andy Burnham ahead of the Labour Party conference in September, is modelled on Help to Buy, a similar strategy spearheaded by George Osborne in 2013 under the Conservative-Liberal Democrat coalition government, running until 2022.

It had been previously reported that Healey was expected to exclude households earning over £90,000 outside London and £110,000 for those buying in the capital.

However, last Thursday the Chancellor rolled back his plans, which would have excluded many middle-earning couples, including nurses and teachers, by capping earnings at £110,000 outside the capital and £140,000 in London, according to the Times.

FTSE 250 housebuilder Bellway had previously warned the revived Help to Buy scheme could further slow the housing market in the near term by encouraging housebuyers to delay decisions.