UK to confirm homebuying loan scheme in October budget

Sept 26 (Reuters) - The British government said on Saturday its new equity loan scheme called "Your First Home" would be confirmed in next month's budget.

The policy, a revival of the "Help to Buy" scheme, is aimed at injecting growth into the economy by increasing demand for house building, as well as assisting first-time buyers.

Here are some details: 

• The government said the scheme was expected to support 2.5% deposits, backed by 20% government-backed equity loans for first-time buyers.

• Home buyers would receive an equity loan of up to 20% of the market value of an eligible new-build property, interest-free for five years, and the loan would need to be paid back in full on sale of the property, within 25 years or in line with the main mortgage.

• Buyers could purchase a new-build property with a mortgage of 75% of the value of the property, with a value of up to £600,000.

• The scheme will also set a household income cap with local property price caps to ensure support is targeted for those in need, the statement from the Ministry of Housing, Communities and Local Government said.

• Housing developers will be expected to make a contribution when signing up to the scheme to help cover costs, the statement added.

• The scheme is a revival of the “Help to Buy” scheme that ran from 2013 till 2022, which helped over a third of a million people purchase a new-build home.

(Reporting by Chandni Shah in Bengaluru, Editing by Timothy Heritage)