A new scheme will support first-time home buyers who can't rely on the "bank of mum and dad", Andy Burnham has announced.
The Your First Home scheme will be targeted at those who most need support getting on to the property ladder, the government said.
The prime minister said he was concerned by the number of young people who have given up owning a home due to high living costs.
Under the scheme, first-time buyers could get the keys to their property with a 2.5% deposit saved.
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With this amount saved, a loan worth 20% of their property's value will be made available to help pay for the purchase.
This equity loan will initially be interest-free to ensure housing costs remain affordable.
It means that a buyer purchasing their first home for £230,000 - the national average for a starter home, according to Rightmove - could put down a £5,750 deposit and access a loan of up to £46,000.
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Funding for the scheme is set 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.
Mr Burnham announced the scheme as he arrived for the annual Labour Party conference, which starts in Liverpool on Sunday.
He 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."
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Housing Secretary Angela Rayner said: "We've seen too many people priced out and giving up on the dream of ever having a home to call their own.
"This scheme will make getting on the first rung of the property ladder just that bit easier and increase access to home ownership."
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