Mortgage hope for key workers

LORNA MARSH Thousands of key workers in the Eastern region and those frozen out by soaring house prices will be given a leg up on the housing ladder thanks to a government scheme launched yesterday aimed at boosting their buying power.

LORNA MARSH

Thousands of key workers in the Eastern region and those frozen out by soaring house prices will be given a leg up on the housing ladder thanks to a government scheme launched yesterday aimed at boosting their buying power.

About 20,000 people nationally will benefit from the Open Market HomeBuy Scheme, which has been developed with private sector lenders to give public sector workers, social tenants and those on council waiting lists mortgages of up to 25pc more than the amount they can already borrow.

It is estimated that the scheme will help 1,701 households across the East including 263 in Norfolk and Suffolk and 426 in Cambridgeshire, Bedfordshire and Peterborough, letting those across the region borrow another £42m.

Under the initiative, selected banks and building societies will provide the borrower with a 12.5pc equity loan, which, when combined with an equivalent loan from the government, will make up a 25pc deposit for each property.

Would-be homeowners only have to be able to afford a mortgage of 75pc of the property value and repayments on the two equity loans do not need to be made for the first five years.

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A family with an income of £35,000, who would at present be eligible for a mortgage of just £122,500, could potentially be able to buy a home worth more than £160,000.

Karen Sykes, sales and marketing manager for Orbit housing association, the agent for Norfolk and parts of Suffolk, added that those on £30,000 would see their buying power increased to £131,000.

"It opens up a whole new market massively to them. It's an absolutely fantastic scheme," she said.

On selling the home the government and lender are entitled to a 12.5pc share of the increase in the value.

Eligibility for the scheme is determined by government HomeBuy agents, employed by local housing associations. Orbit and Keyhomes East are the agents for Norfolk, Suffolk and Cambridgeshire.

Housing minister Yvette Cooper said: "In the long run we need to build more homes to ease the pressure on house prices. But in the meantime this new mortgage deal will help thousands of families into a home of their own."

Four lenders have signed up to be involved from the outset - Nationwide, Bank of Scotland, Advantage and the Yorkshire Building Society.

Stuart Bernau, executive director at Nationwide, said: "When it comes to buying a property in today's markets, key workers and first-time buyers need all the help they can get."

People living in Norfolk and Suffolk (excluding Forest Heath and St Edmundsbury), who are interested in the scheme, should contact Orbit on 0845 850 2050 or visit www.orbithomebuyagents. org.uk. Those living in Cambridgeshire, including Fenland and Peterborough, Forest Heath and St Edmundsbury, should contact Keyhomes East on 0845 456 6757 or visit www.keyhomes-east.org.uk