First-time buyer scheme income caps reportedly raised ahead of Budget

The government has reportedly raised the household income limits for its Your First Home scheme before Wednesday's Budget. The change would widen who can qualify as a first-time buyer in England.

We reported in October that Mojo Mortgages said more than 13% of its first-time buyer applicants across two years of its data would fall outside the proposed Your First Home caps.

The cap outside London is reported to have gone from a proposed £90,000 to £110,000. In London it is reported to have gone from £110,000 to £140,000.

Under the scheme, buyers of new-build homes would put down a 2% deposit and receive a 20% equity loan from the government. A limit on property values will apply, in the way it did under Help to Buy.

Neil Jefferson, chief executive of the Home Builders Federation, said Your First Home "has the potential to help more people onto the housing ladder". He said its success depends on the detail to be set out at the Budget.

Jefferson said the income and house price caps, developer contributions, and the scale and duration of the scheme must be "carefully designed so it is attractive to customers and accessible to builders of all sizes across the country".

Mortgage brokers had raised concern that the original limits could shut out couples on higher pay, including key workers in London. One example given was two London paramedics, each earning more than the reported average of £60,000. Their joint income of over £121,000 would have been above the original London cap of £110,000.

Only new-build homes qualify. The Budget statement is expected to confirm the property value caps, any regional differences and how long the scheme will run.