Affordable housing scheme expanded

All first-time buyers with a household income of £60,000 a year or less will be able to apply to buy a share of a home, under a major expansion of the Government’s HomeBuy programme announced today.

The affordable housing scheme, which was previously only open to key workers and social housing tenants, allows buyers to purchase a share of a property – starting at 25% - with the option of buying up to 50% of the property using a shared equity mortgage.

Housing Minister Caroline Flint also announced a new initiative to enable the Housing Corporation to allocate up to £200m of its resources to buy new properties on the open market, either to be made available to first-time buyers through the HomeBuy scheme or social renting.

But according to Stewart Baseley, executive chair of the Home Builders Federation, the new measures still do not go far enough. “While welcoming any measures that may boost the housing market, today’s announcement is not enough," he complained. "The current situation demands drastic action and we have been calling on the Government to take a range of measures to address the situation." He added that the Government needed to act now to safeguard its long-term targets.

The announcement followed media reports that Caroline Flint was photographed yesterday carrying her briefing notes for the morning cabinet meeting. The notes, in plain view of waiting photographers, outlined the Government's apparent fears for the current state of the housing market. p>

Commenting on the issue, Liberal Democrat Shadow Chancellor Vince Cable said: “The housing market has been over-inflated and is due a correction." He added: "There is a danger that with high food prices and soaring debt repayments, mass repossessions could lead to a serious housing crash of the like we saw under the last Tory government.”