Andy Burnham is facing major questions over the cost of a taxpayer-backed scheme to help first-time buyers get on the housing ladder.

Labour’s Your First Home scheme is designed to help those without family money purchase their own property.

First-time buyers could get the keys to their home with just a 2.5 per cent deposit saved, as well as being able to access an interest-free equity loan worth 20 per cent of their property’s value.

The Prime Minister said he was concerned by the high number of young people who have given up on home ownership because of high living costs, and wanted to change that.

Housing Secretary Angela Rayner said local politicians will get stronger powers to take possession of empty and derelict homes so they can be brought back into use. 

But questions have been raised about what the scheme will do to the housing market as well as borrowing figures, which are already high.

It also comes as Labour struggles to get anywhere near its target of building 1.5million new homes by 2029. 

Shadow housing secretary Katie Lam said: ‘This is a colossal admission of failure.’

The Prime Minister said he was concerned by the high number of young people who have given up on home ownership because of high living costs, and wanted to change that.

Housing Secretary Angela Rayner said local politicians will get stronger powers to take possession of empty and derelict homes so they can be brought back into use

‘Labour is finally admitting that they will fail to deliver the homes they promised.

‘Now it wants first-time buyers to take on even more debt to afford the few homes that have been built, with taxpayers taking a stake in their homes and picking up the bill for months.

‘Slapping another levy on developers risks pushing up the price of new homes too.’   

With the national average first-time home costing £230,000 according to Rightmove, this means that a buyer could put down a deposit of £5,750, and access a loan of up to £46,000 to help with the purchase. 

Full details of the scheme will be set out at the Budget on October 28 by the Chancellor John Healey.

Announcing the scheme as he arrived in Liverpool for Labour’s annual conference, the Prime Minister said: ‘Too many young people are struggling with the cost of housing, with many giving up hope of ever having a home to call their own.

‘So we will step in to help more first-time buyers on to the housing ladder, especially those who can’t call on the bank of mum and dad.

‘Your First Home will get them the keys to their own front door, and give builders the confidence to deliver the high-quality new homes the country needs. This Labour government is bringing back hope for people across the country.’

Funding for the scheme is expected to come from reprioritising existing Government budgets.

Housing developers will also pay towards the running costs of the scheme, which ministers hope will give the industry confidence to build new homes.