Housing Boost for Key Workers and First Time Buyers

A major package of new measures to support key workers and other first time buyers into affordable homeownership, was announced last week by the Prime Minister Gordon Brown, and Housing Minister Caroline Flint.

New cash grants of £1,500 will be offered to buyers who take up a shared equity loan under the Government's Open Market Homebuy scheme (OMHB); whilst to help increase long term housing supply, the Government is confirming the locations of surplus public sector land sites that will provide 30,000 new homes, many of which will be affordable.

Caroline Flint and Treasury Ministers will be convening a working group involving the Council of Mortgage Lenders, and industry representatives this week to continue discussions on what more the industry could and should be doing to support borrowers in difficulty in line with their obligations under FSA regulation to treat all customers fairly. This will include discussions as to how the government working together with industry can address the concerns of homeowners in difficulty.

The new grants will help key workers taking up OMHB with the costs associated with setting up a new home such as solicitor's charges, fees, and furniture. More than £3 million has initially been earmarked for the first wave of grants.

Under OMHB, key workers can boost their purchasing power by up to 50 per cent following the launch of two new shared equity mortgage products announced in the budget. This means 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.

The Government is stepping up its drive to increase housing supply, by confirming the disused public sector sites that will provide 30,000 more homes across England.
National Regeneration Agency, English Partnerships, will set out the brownfield sites from its programme, such as former coalfields and surplus local authority land, that will be used to deliver the homes.

Developers bidding for the sites, which will go through the full planning process, will have to provide a high level of affordable housing, and build to high environmental standards under the Code for Sustainable Homes, with all homes being 25 per cent more energy efficient than those previously built.

The Government is committed to delivering 200,000 homes on surplus public sector land by 2016, as part of its response in the Housing Green Paper to increasing supply following decades of not building enough homes to keep up with rising demand.

The Prime Minister said:

'We want to do more for people who may need an extra hand to buy their first home. By offering new grants and sharing a stake in their home, we are making the dream of a new home more affordable for thousands of low-income first time buyers and key workers such as nurses and teachers.'

Housing Minister Caroline Flint said:

'We urgently need to meet the challenges of building more homes. Our plans for public land, and tougher building regulations, mean we can deliver the homes our young families and first time buyers desperately need, whilst protecting and maintaining the environment. It is important that we look at what more can be done to support households most at risk from the impact of the global credit crunch, working closely with the Council of Mortgage Lenders.'