New scheme gives first-time buyers foothold on property ladder

The scheme will offer first-time buyers an affordable way into the housing market by initially only asking them to meet the cost of the construction of their home, with the landowner retaining the full value or a share of the land. Over time buyers will be able to increase their share in 10% tranches to 100%.

Launching the scheme as part of the five-year plan, John Prescott said: “To begin with the first-time buyer initiative will use land owned by the government and its agencies, but I want to encourage other public and private sector landowners – in urban and rural areas – to use their land for new affordable housing.

“Separating the cost of land and the cost of construction will be a big help in driving down the purchase price for the homebuyer.”

In April 2004 the ODPM purchased 100 surplus NHS sites covering 1650 ha for £400m from NHS Estates.

The new scheme ties in with a “£60,000 home” design for manufacture competition, also launched on Monday. The competition, run by the government and regeneration agency English Partnerships, will invite bids for the right to construct developments, and a total of up to 1000 homes, on a selection of EP sites.

The aim is to demonstrate that it is possible to build a home that reaches good design standards for £60,000. About a third of these homes will contribute to the first-time buyers initiative. Full details on the winning schemes will be revealed in the spring.

Speaking at a five-year plan briefing, housing minister Keith Hill said: “All of the responses we have had reassure us that the £60,000 house will be obtainable.”