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Mortgage lenders and government help first time buyers

Mon, 23 May 2005

Gordon Brown announced plans of cooperation between mortgage lenders and the government in order to help first time buyers onto the property ladder .

The plans designed to offer young people financial help in buying their first home, will benefit thousands of first time buyers .

Mr Brown said the deal between the government and mortgage lenders could cut the average repayments on a mortgage for a £200,000 home by up to £372 a month

Under the five-year part-ownership plan, buyers will be expected to raise at least half the cost of homes sold on the open market, with the remaining equity shared by the government and the mortgage lender.

The Chancellor said: "It means that people who couldn't afford the full price of a home can afford the partial price, and they can gradually ramp up their stake.

"It's putting home ownership within the reach of thousands of people who would not be able to do so.

"This is part of our idea of helping people meet their aspirations for themselves: I have no doubt that more people want to be able to get a foot on the housing ladder earlier, and there are a lot of people who feel this is beyond their grasp."

Mr Brown suggested that the initiative could help the UK achieve a higher rate of home ownership than the US or Germany. The Treasury said a pilot scheme was already been in place for existing properties .

Peter Williams of the Council for Mortgage Lenders said: "There's no doubt there's an aspiration for more people to be homeowners, and there is an issue that people can't get into the market at the moment."

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