GOVERNMENT UNVEILS NEW HELP TO BUY SCHEME AS HOUSEBUILDER SHARES SURGE

The government has announced a scheme called "Your first home" to help first-time buyers in England who have a steady income but have struggled to save a deposit or lack family support. It would offer a 20 per cent equity loan towards a 2.5 per cent deposit, with an interest-free period. The Prime Minister announced the programme, and Andy Burnham said it would help buyers unable to rely on the "bank of mum and dad". Housebuilder shares rose sharply in response, with Persimmon, Barratt Redrow, Taylor Wimpey and Bellway all jumping between 13 and 15 per cent.

Vistry, whose shares fell last week after new boss Adam Daniels announced plans to downsize the company, rose more than 22 per cent, the biggest gain among housebuilders, boosting the wider FTSE 100 index. The scheme follows the original Help to Buy equity loan programme, introduced by George Osborne in 2013 and closed in 2022, which housebuilders had urged the government to revive. Full details of "Your first home" are expected at the Budget. An official report found the original scheme offered "very high value for money", while the Institute for Fiscal Studies said its impact on social mobility had been "limited".

Commentators said the scheme's aim may be to boost housebuilding as the conflict involving Iran raises construction costs and weakens consumer confidence. Thinktank figure Robert Colvile said Help to Buy, old and new, was designed "to get housebuilding going again". Analyst Anthony Codling said the scheme would be a "catalyst" for a re-rating of the sector, adding that "Christmas has come early" for housebuilders. Economists and property experts remain divided over whether the original scheme mainly benefited buyers or the industry.