Published on : Mon, 05 Dec 2005 18:04GMT
by : Andy Clarke

LONDON - In an effort to help first-time buyers get on to the housing ladder, Chancellor Gordon Brown has unveiled a novel shared-equity scheme that involves the lender, the buyer and the Government.

Announcing the details of the scheme in his pre-budget report to the Parliament, the Chancellor said, “We know that shared equity has an increasing role to play in helping young couples in all our constituencies get on the first rung of the housing ladder.

I can announce that three of the biggest building societies and banks have joined the government as partners in shared equity." Nationwide building society, Halifax and the Yorkshire Building Society will partner the government in this scheme.

According to this scheme, first-time buyers have to put up 75 percent of the cost of the property, while the lender and the Government will share the remaining quarter of the cost between them. If the property is put up for sale, then all the involved parties will be entitled to their share including profits or losses if any.

"Our aim: a new consensus across our country on the extension of home ownership and affordable housing - public and private sectors working and investing together to strengthen our economy, protect the environment and meet the housing needs not just of some but of all," Brown commented.

This shared-equity scheme will be launched in October next year and aims to help out 20,000 first-time buyers over the five years of its life. Nationwide spokesman Steve Blore commented that although the details needed to be chalked out, the scheme was definitely on, "It is certainly being launched as a pilot scheme. Government and lenders will determine whether it will be opened up further when that scheme unfolds," he said.

"There will be some discussion on these issues, but it is mainly down to government departments, principally the Office of the Deputy Prime Minister." Brown said that the government was in discussion with investment companies to see if they were interested in putting any stake into the scheme.