The Council of Mortgage Lenders has welcomed the government’s announcement of measures to increase housing supply.
The CML has confirmed that privately-financed equity loans will be available from next year to potentially double the number of aspiring first-time buyers who could be helped through Open Market HomeBuy.
The government already planned to offer more than 20,000 Open Market HomeBuy equity loans between 2005 and 2010.
But with lenders part-funding equity loans, the number could now be up to 40,000.
Under Open Market HomeBuy, the borrower will get a 75% mortgage, a 12.5% equity loan from the same lender, and a 12.5% equity loan from the government.
The costs will be in line with existing low-cost home-ownership schemes. Those eligible to apply will be key workers, social tenants, those on the housing register and other first-time buyers identified as priorities by regional housing boards.
Peter Williams, deputy director-genera lof the CML, says: “Although the package of measures to address housing supply in the UK may well still fall short of the Barker targets, we are heading in the right direction.
“The private funding for equity loans, although modest in scale, will give us real experience of operating a public/private support scheme for first-time buyers.
“If it succeeds, it could over time open up a welcome increase in flexible options across the wider housing market.”