Interest Free Loans for Some First Time Buyers

Wed, 17 Oct 2007

The government have unveiled changes to their HomeBuy scheme, designed to help key workers get onto the property ladder .

Key workers, such as those in the health and education sectors, living in London, the South East or East Anglia may be eligible for an interest free loan equal to 17.5% of the prospective house price . For example, if you were a key worker in London purchasing a house, with an average house price of £355,000 that would amount to a loan of £62,000. Once you decide to sell the house, the loan becomes repayable at a fixed rate of 17.5% of whatever the resale price is. In order to be eligible for the loan, the household income of key workers living in the suitable regions must not exceed £60,000. However, other than those requirements, the government have been rather vague as to whether all applicants will receive the loan .

The previous HomeBuy scheme contributed 12.5% of the house price to key workers, though it appears that no more money has been invested into the new plan, making it unlikely that all applications for the increased loan will be successful.
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