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First-timers offered mortgage help

Date: Mon, 23 May 2005

Chancellor Gordon Brown outlined a new scheme that will enable buyers to jointly-own their first home by raising around 75 per cent of the property's market value.

The remaining equity in the property will then be shared between the government and mortgage lenders. Although buyers would still have to pay a 'rent' of around three per cent on the part they do not own, with the option to buy the whole property if their financial circumstances improve.

"This is part of our idea of helping people meet their aspirations for themselves: I have no doubt that more people want to be able to get a foot on the housing ladder earlier, and there are a lot of people who feel this is beyond their grasp," said Mr Brown.

In contrast to previous schemes, the new option is not restricted to key public sector workers and there is no means test. However, banks and building societies will have the final decision to ensure that people do not over stretch themselves financially in order to obtain a property.

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