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Like Help to Buy, the scheme would only be available for new homes, so encouraging housebuilding. “Connecting it only to new builds would ensure that increased demand is directed towards growing the supply of new homes, rather than increasing the value of existing stock.” While First Step could be regarded as a slightly tweaked reboot of Help to Buy: Equity Loan, the Fabian Society’s report also contains a more radical plan – to allow people to buy a home for £1. This, the think tank says, would “provide low-cost homeownership to around 25,000 families over a decade”. It would be open to households where all adults have been “key workers” for five years and have “total household wages in the bottom 40% of the income distribution” while somehow also being “able to afford the renovations and improvements for the property”. The scheme would encourage housing providers to sell off sub-standard social housing stock, alongside empowering councils to compulsorily purchase empty homes. It’s modelled on the €1 house programme in Italy, aimed at stopping the decay of rural towns and villages, but the idea has so far met with almost total silence in the UK. What will the new PM make of the Fabian Society’s proposals? Well he has already committed himself to both ending rough sleeping and undertaking “the biggest council housebuilding programme since the postwar period”, so it’s fair to say that the housing crisis is already fairly high up the new Government’s agenda. How this will evolve into action remains to be seen, but hopes are high that some form of support for first time buyers will be reintroduced.
Britain hasn’t fallen out of love with homeownership – far from it. People still see owning a home as central to their stability, their security and their future. But what’s changing is belief. For too many people, particularly those who haven’t bought by their late 30s, the dream starts to feel out of reach. With older Millennials now reaching their mid-40s, at Yorkshire Building Society we are concerned that the UK may already be seeing the early effects of a lost generation – and without action, this risk could extend to younger cohorts. If we want that opportunity to exist for the next generation, the time to act is now. Fixing the housing ladder isn’t just about helping people take their rst step – it’s about making sure they can move through it as their lives change. We need Government, industry and lenders to come together as they never have done before, to create a system that works from start to nish: helping people become
If we want that opportunity to exist for the next generation, the time to act is now
already privileged people to buy a bigger home than they would otherwise be able to buy.” For this reason, the Fabian Society is proposing a scheme that restricts help based on household income. Initially aligned to the same levels as Shared Ownership (£90,000 in London and £80,000 across the rest of England), the income cap would be increased each year in line with wage growth, rather than being fixed like Shared Ownership. There would be no cap on the maximum house price, as there was with the final iteration of Help to Buy, as the availability of mortgage multiples would provide an informal cap. One of the more contentious aspects of Help to Buy: Equity Loan was that the amount that had to be repaid by the buyer was a percentage of the value of the property at the time of repayment rather than a fixed amount. Around 45% of all the Help to Buy loans have not yet been repaid, with some buyers finding that a combination of rapidly rising house prices making the repayment amount larger, plus interest being charged on the equity loan after five years and rising mortgage costs, means they can’t afford to repay it. And while the Government has made £1.24bn profit on the state’s share of Help to Buy equity loans that have been repaid, alongside £500m in interest payments, the scheme did expose the taxpayer to considerable risk in the event of a house price crash. As an alternative, the Fabian Society is recommending a system that limits risk to both buyers and the Government. “First time buyers will owe the cash amount borrowed when the property was first purchased, with any interest owed (after year five). The amount owed will be clear, transparent and easily understood – enabling first time buyers to be confident about the decisions relating to repayment. And it will give the Treasury confidence that these loans will be repaid in full, even where the value of a property fails to increase.” While the scheme would initially cost the state £2.1bn a year, it is expected to be revenue neutral as loans would be rapidly repaid.
£1 THE
HOME PLAN
ready to buy, helping more people access
ownership, and making it easier for them to move on when the time comes. That’s what a functioning housing market should do – and right now, it isn’t doing it well enough.
The radical proposal could provide low-cost homeownership to around 25,000 families over a decade
Tom Simpson , Managing Director of Homes, Yorkshire Building Society
First Time Buyer October/November 2026 95
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