New Homes for Low - Income Families Announced

The Government has announced that a scheme which will make unsold new homes available for housing association tenants is to be accelerated. The plan is aimed at making it easier for first-time buyers to get onto the housing ladder.

Despite falling house prices, the UK still has one of the most expensive (in terms of the ratio of average house price to income) housing markets in the world. The ‘credit crunch’ has made obtaining a mortgage more difficult as lenders seek larger deposits than heretofore and even if that hurdle is crossed, it is difficult to find mortgage finance at attractive rates. An additional £200 million of funding is to be provided.

The current shared-equity scheme will be extended to all low-income groups and an additional  £100 million of funding is being provided. The scheme is currently only open to key workers.

Although announced with the usual splash of publicity, it should be remembered that at May 2008 prices, £200m will buy fewer than 1,000 new homes.