Page last updated at 16:11 GMT, Monday, 15 December 2008

Extra help for first-time buyers

Magaret Beckett
The scheme is designed to help the industry and first-time buyers

The government has promised an extra 100m to help first-time buyers get on to the property ladder.

Housing Minister Margaret Beckett said 400m would be made available - up from 300m when the scheme was first announced in September.

Mrs Beckett added that the government was determined to provide "real help" for families in the current difficult economic climate.

More than 130 developers have agreed to take part.

Under the scheme, households with incomes below 60,000 will be able to buy a new home with the help of a shared equity loan. Mrs Beckett hopes this will help up to 18,000 first-time buyers.

The equity loan will be partly funded by the government and the developer.

The loan, which will be free of charge for five years, can be used as a deposit and can cover up to 30% of the purchase price.

'Protecting jobs'

The scheme will also support the house-building industry by identifying buyers for their new homes, helping them to weather the current difficult conditions in the market.

Eligible first-time buyers will be able to apply for the scheme from early 2009.

Mrs Beckett said: "For many young families who aspire to own a home, the difficulties in the housing market have made the step on to the property ladder that bit harder."

She added: "This deal will give them more support and put their dream of becoming home owners within reach. At the same time, this scheme will also help developers to weather the tough times in the market, by protecting jobs and helping to keep business going."

But the Royal Institution of Chartered Surveyors (Rics) warned that the scheme would only be successful if the banks gave out mortgages to applicants for the scheme.

"The attitude of mortgage lenders will determine if the scheme is a success and to work effectively the major lenders must be prepared to give people mortgages to buy their share of the property," said James Rowlands, Rics policy officer.

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