Chancellor Rachel Reeves has unveiled a £39 billion investment in social and affordable housing, stretching from 2026 to 2036—the largest such spending injection in a generation. This ups the annual average funding to nearly £3.9 billion (up from £2.3 billion), with plans to hit around £4 billion per year by 2029–30.
What this means for First Time Buyers
- More new homes and specifically more affordable ones should help ease competition, taking the pressure off prices.
- These homes will be delivered via local authorities, housing associations, and private developers, many of which allocate units for first time buyers and low-income households.
- Housing associations will gain borrowing power thanks to rent increases pegged at CPI + 1%, ensuring long-term viability.
- More homes being built especially affordable and social rent units may ease pressure on limited housing stock in popular segments.
- News on Mortgage Guarantee Scheme below:
Quote on behalf of Sarah Thompson, Managing Director, Mortgage Scout part of LRG.
“It was easy to miss, but today’s Government Spending Review quietly confirmed that the Mortgage Guarantee Scheme will be made permanent. There was no formal announcement and no further details, and with the current scheme ending on 30 June, buyers are left waiting until July to understand exactly what will change.
“The scheme allows lenders to offer 95% loan-to-value mortgages by providing a government guarantee on the portion between 80 and 95%. In practical terms, that gives buyers the chance to purchase with just a 5% deposit. With high rents and rising living costs making it harder to save, this kind of support is critical for those trying to move from renting to owning. However, the current scheme excludes new-build homes, which is a key issue for many first-time buyers. If the government wants to improve access, it should look at widening the scope of the scheme and making it more inclusive.
“Although mortgage rates are now starting to fall, the size of the deposit remains the biggest challenge for most buyers. A permanent guarantee scheme could bring much-needed consistency to the market and give both lenders and borrowers greater confidence. We will be watching closely for the details in July, but the signal from the government is clear: helping buyers with smaller deposits is back on the agenda.”
First Time Buyer is an exciting bi-monthly glossy which takes a stylish and comprehensive look at all the options available, setting them out in an entertaining and informative way, and helping potential customers navigate their way through what is often a daunting and complex process. We dispel the myths, reinforce the facts and arm the reader with the tools necessary to make their homeownership dreams a reality.
