Help for first-timers

A new Open Market Home Buy scheme will be launched on a pilot basis from October 2006, with the aim of helping an additional 20,000 households into home ownership by 2010. The Chancellor announced agreement with three lenders, Nationwide and Yorkshire Building Societies and Halifax Bank of Scotland. The government and the lenders will each put up 12.5% of the cost, leaving borrowers to find a 75% mortgage on a 'shared equity' basis.

Stuart Bernau, executive director at Nationwide, said, "We're pleased to be involved with this scheme to bring 20,000 more first time buyers into home ownership. It is in everyone's interest that first time buyers are able to get a foot on the housing ladder and we are keen to play our part." However, he also pointed out that, "The mortgage rate charged will be a little more than with standard products. There has got to be a small economic return for us given we are putting more capital behind it."

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