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£400m Government boost for first-time buyers

Housing Minister Margaret Beckett has approved a deal worth more than £400m to help first-time buyers to buy their own home.

More than 130 developers have agreed to offer the HomeBuy Direct scheme, which will help up to 18,000 first time buyers to purchase a home at sites across England aided by an equity loan, part funded by the Government and the developer.

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

This means a first-time buyer could purchase a house worth £180,000 for as little as £126,000. The HomeBuy schemes is available to any first-time buyers whose household income is under £60,000 who cannot otherwise afford to buy will be able to apply.

Beckett says: “We are determined to give families real help in the current economic climate. 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. 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.”

Eligible first time buyers will be able to apply for the scheme from early 2009 by contacting a HomeBuy agent in their region.

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