Cheap mortgage plan for first time buyers

23-May-2005

The government has launched a new scheme designed to bring more first time buyers into the property market by offering them cheap mortgages.

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Chancellor Gordon Brown has stated that he intends to see as many as 100,000 new homeowners in the next five years and has detailed his plans to achieve that.

It could mean that a first time buyer would only need to raise half the cost of a home sold on the open market, with the remaining equity being paid by the government.

That could mean that finding a deposit and finding a mortgage could be much easier for aspiring first time buyers because they will not have to worry about paying for the full cost of a house.

The move is part of the government's pre-election pledge to increase the number of new homeowners to two million more than in 1997.

Mr Brown explained: "The idea is that building societies, mortgage lenders, the government and the prospective owner share the cost of the mortgage, with perhaps 75 per cent held by the prospective owner."

By using such a joint ownership scheme, ministers are confident that the programme will help aspiring homeowners to get a foot on the property ladder.

See what's in our unique, comprehensive and detailed joint ownership guide

However, Peter Williams, from the Council of Mortgage Lenders (CML), warned that the government need to put more effort into building more affordable homes, claiming that without such investment, this new scheme will have little positive effect.

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