UK's Revived Help to Buy Scheme Fails to Address London Housing Crisis, Analysts Warn

The UK government's newly announced "Your First Home" first-time buyer scheme is unlikely to meaningfully boost housebuilding in London, industry analysts and developers warn. The plan, announced last weekend by Andy Burnham, offers a 20pc government-backed equity loan on a 2.5pc deposit for new-build purchases. London new-build starts plummeted 72pc year-on-year in 2024-25, putting the capital on track for its lowest delivery rates since World War II. Developers say the 20pc loan is insufficient given London's property prices. Unlike the previous Help to Buy scheme, which offered a 40pc equity loan in London on homes up to £600,000 with no income cap, the new plan applies both price caps and household income caps. Savills analysis found that in half of London boroughs, no more than 10pc of privately renting households could afford an average-priced new build under the scheme. In Kensington & Chelsea and Westminster, the shares are 0pc and 3pc respectively. Analysts say the government would need to set an income cap of roughly £120,000 for the policy to function in London, an unlikely threshold for a Labour government. Developers await October's Budget for further details.