Changes to be made to key worker mortgage scheme

Permalink: Changes to be made to key worker mortgage scheme
by Kay Murchie

Key workers struggling to get onto the property ladder will benefit from a revised Government scheme.

Changes made to the Open Market HomeBuy system will mean selected key public-sector workers will be able to take out a mortgage for half their property’s cost at an initial interest rate of just 1.75%.

For example, the change means that someone looking to purchase a property with a market value of £300,000 will be able to take out a mortgage for just £150,000.

The move is intended to increase the number of workers such as teachers, nurses, police and social workers, taking advantage of the scheme.

The old scheme was said to be an ‘embarrassing flop‘, it helped just 2,000 first-time buyers on to the property ladder. That represents less than 0.6% of the 358,000 first-time buyer transactions in 2007.

The move comes after a clampdown on mortgage lending, which has hit struggling first-time buyers hard and led to many lenders withdrawing 100%-plus mortgages.

There are many schemes designed to help first-time buyers onto the property ladder. Some help buyers by offering them a cut-price mortgage or allowing them to buy a stake in a property that they may eventually be able to buy outright.