Helping first time buyers onto the property ladder

Date article online: 14/05/2008

New support to help first time buyers into affordable home ownership is being announced today by Housing Minister Caroline Flint.

The measures are a key part of the Government's priority set out in the today's draft legislative programme, to ensure a strong stable economy and to provide opportunities to all people to meet their aspirations.

From today, all first time buyers with a household income of £60,000 a year or less will have the opportunity to apply to buy a share of a home, under a major expansion of the Government's Homebuy programme.

Currently, the scheme is open only to key workers like nurses and teaches, social tenants, and some buyers identified as a priority regionally.

But the new rules will mean that all first time buyers will have the option to apply for the HomeBuy programme, for the first time. This allows buyers to purchase a share from 25% of a property or to boost their purchasing power by up to 50% with a shared equity mortgage.

For example a household with an income of £32,000 could afford a house of £200,000, paying £760 each month - as opposed to £1,350 without the scheme.

Other measures being announced today to support first time buyers include: 

• A new initiative to enable the Housing Corporation to allocate up to £200m of its resources to buy new properties on the open market, either to be made available for first time buyers to purchase through the HomeBuy scheme or for social rent. The Housing Corporation and housing associations will work together to ensure new properties are purchased from developers at competitive prices. 
• Expanding the Open Market HomeBuy scheme so more households will be able to take advantage of a shared equity loan, to buy a new build property on the open market. Buyers will be able to identify the home they wish to purchase from a house builder and then apply for support from the homebuy scheme.

Housing Minister Caroline Flint said: "Most families aspire to get onto the housing ladder, but are being priced out of the market. We want to give them the support to help them buy an affordable home. The long term solution to the challenge of affordability is to build more homes. But in the meantime, we are doing more by giving more first time buyers the chance to boost their purchasing power and put their dream home within reach."

Under the HomeBuy programme, first time buyers have the opportunity to take advantage of either a shared equity or shared ownership product to help them buy their home.