The 4 ways Rachel Reeves could help first-time buyers in the Budget

Chancellor Rachel Reeves is adamant about the need to balance the books, making giveaways unlikely.

Still, Labour campaigned on a pledge to boost economic growth, with a house building revolution at the heart of that vision.

But what good is building new homes if people can’t buy them?

With that in mind, here is a shopping list of measures to help first-time buyers (FTBs) that the Chancellor may want to consider if she is serious about supporting the housing market.

Keep higher FTB stamp duty threshold

In 2022, the Conservatives raised the FTB stamp duty threshold from £300,000 to £425,000, although it’s set to drop back in March.

Labour has confirmed it will not extend the relief, which cost the government £708m in the 2022-23 tax year.

With stamp duty bringing in £11.7bn in 2022-23, it’s likely tempting for the government to let this tax break lapse.

But the impact on FTBs would be huge. Zoopla estimates that reversing the relief will see an extra 30% more FTBs paying stamp duty, with some set to see their tax bills rise by thousands.

For many would-be buyers, already hit by soaring living costs, rents and rates, this could be a deal-breaker.

Launch Help to Buy 2.0

The Help to Buy scheme has helped over 387,000 FTBs onto the property ladder since it was first launched in 2013.

Though the 2021-23 version had stricter criteria, it remained a lifeline for those struggling to buy.

With interest rates and living costs significantly higher than they were, it has become a lot harder to build up a deposit. Therefore, the need for a replacement is greater than ever.

The government lent roughly £24.7bn to buyers through the scheme between 2013 and 2023or £2.47bn a year.

That’s a large annual outlay, something the current government may baulk at when you consider it is years before they see any return on their investment.

A successor is unlikely, but its impact would be undeniable.

Fix the Lifetime ISA

Like Help to Buy, the Lifetime ISA has been a valuable vehicle for helping first-time buyers onto the housing market, topping up their deposit money by up to £1,000 a year.

However, in the seven years since it launched, the average UK house price has soared by 27.8%, according to Nationwide.

In London, the average price is north of £525,000, meaning there is a strong argument for lifting the £450,000 purchase cap.

This would be a lifeline for buyers in London and the South East, where house prices are well in excess of the national average.

Promote FTB schemes

When there is a problem, the tendency is a to dream up a new solution to fix it. However, when it comes to boosting FTB numbers, we already have one: shared ownership.

Though not without flaws, shared ownership has the potential to help thousands more get onto the ladder. However, it has never captured the public’s imagination in the same way Right to Buy has. According to Census data, shared ownership makes up just 1% of households in the UK.

I would like to see the scheme revamped, revitalised and promoted by Government as a means of getting a first foot onto the housing ladder.

Marie Grundy is Managing Director of Residential and Second charge at specialist lender West One Loans