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Govt sets out three-pronged strategy for affordable homes

The Government has outlined details of its flagship HomeBuy scheme designed to enable 100,000 people to find their own home by 2010.

The proposals draw on feedback from key stakeholders, including social tenants, buyers and housing providers to a recent consultation paper.

Under the proposals, which will come into force from April next year, there will be three HomeBuy products, all using equity sharing to make housing more affordable.

Social HomeBuy will enable tenants to buy a share in their property. There will be a minimum initial purchase of 25 per cent of a home. The remainder will be held by a housing provider, such as a social landlord or local authority, which will be able to charge up to 3 per cent on their share. A lower average target for the charge will be set at 2.75 per cent.

Homebuyers who select the Open Market HomeBuy option will be expected to raise finance to buy 75 per cent of a property on the open market. A housing provider will then provide the balance, on which a small charge will be made.

This scheme will be restricted to key public sector workers, social tenants, those on housing waiting lists and other first-time buyers identified as priorities by regional housing boards.

Buyers using New Build HomeBuy will have to make a minimum initial purchase of 25 per cent of a newly-built home. A housing provider will hold the remaining share, on which they will be able to levy 3 per cent although a lower target average will be set at 2.75 per cent.

Housing minister Baroness Andrews says: “New Build and Open Market HomeBuy will offer people choice and flexibility when accessing affordable homeownership.”

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