Housing scheme for key workers

Posted: 03 Oct 2006 11:06:43 GMT

A new initiative aimed at helping thousands of key workers in Britain get a foot on the property ladder has been launched.

A new initiative aimed at helping thousands of key workers in Britain get a foot on the property ladder has been launched.

The Open Market HomeBuy Scheme is designed to help public sector key workers, social tenants and other eligible people to purchase a home in the area where they work, which they may not otherwise have been able to afford.

Approved applicants will receive a free equity loan to help them buy the property of their choice, up to the value of 25 per cent and a conventional mortgage for the remainder.

Half of the equity loan will be funded by the government and the remaining half by selected private sector lenders and around 20,000 people will be able to enter the property market as a result of the new scheme.

First-time buyers will be required to find a mortgage for just 75 per cent of the total value of the property and repayments on the equity loans are not required for the first five years of the mortgage. If homes are sold before loan repayments start then the government and the lender are entitled to a 12.5 per cent share of any increase in value.

The initiative means that a family with combined income of £35,000 will be able to purchase a house worth more than £160,000 rather than one for just over £120,000.

Government HomeBuy agents will determine eligibility and housing minister, Yvette Cooper, claims that the Open Market HomeBuy Scheme will benefit thousands of families struggling with affordability constraints.

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