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Mortgage boost for first time buyers

24 March 2006
First time buyers looking to get onto the property ladder received a budget boost this week, with the expansion of the Open Market Homebuy Scheme.

Chancellor Gordon Brown announced on Wednesday plans to spend £970 million over the next two years in promoting shared equity ownership.

Under existing schemes, new buyers can seek a mortgage for 75 per cent of a property's value, while the government makes up the remaining 25 per cent.

The government charges no interest on this loan, but instead is entitled to a quarter of the proceeds from any future sale of the property – including profits.

Mr Brown claimed that around 35,000 people would be helped onto the property ladder by his plans, which include piloting a scheme under which the buyer only puts up 25 per cent of the cost.

In addition to the shared equity proposals, the chancellor reiterated his commitment to the Social Homebuy and New Build Homebuy schemes, which have already been announced.

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