A major package of new measures to support key workers and other first time buyers into affordable homeownership was recently announced by the Prime Minister Gordon Brown and Housing Minister Caroline Flint.

New cash grants of £1,500 will be offered to buyers who take up a shared equity loan under the Government’s Open Market Homebuy scheme (OMHB). Whilst to help increase long term housing supply, the Government is confirming the locations of surplus public sector land sites that will provide 30,000 new homes, many of which will be affordable.

The new grants will help key workers taking up OMHB with the costs associated with setting up a new home such as solicitor’s charges, fees, and furniture. More than £3m has initially been earmarked for the first wave of grants.

Under OMHB, key workers can boost their purchasing power by up to 50% following the launch of two new shared equity mortgage products announced in the budget. This means a household with an income of £32,000 could afford a house of £200,000, paying £760 each month - as opposed to £1,350 without the scheme.

Flint said: “We urgently need to meet the challenges of building more homes. Our plans for public land, and tougher building regulations, means we can deliver the homes our young families and first time buyers desperately need, whilst protecting and maintaining the environment. It is important that we look at what more can be done to support households most at risk from the impact of the global credit crunch, working closely with the CML.”