Scheme launched to help first-time buyers

FirstBuy will see the Government and housebuilders provide buyers with an equity loan of up to 20 per cent (MATT CARDY / GETTY IMAGES)

A new scheme aimed at helping first-time buyers to get a foot on the property ladder was launched by the Government today.

FirstBuy will see the Government and housebuilders provide buyers with an equity loan of up to 20%, meaning potential buyers will have to put up a 5% deposit to qualify for a 75% mortgage.

The Government will be making some £500 million available across the UK over the next two years to fund FirstBuy, which it is expected will help some 10,000 people in England alone to secure their first home.

Some 100 housebuilders have signed up to the scheme so far, including Permission, Barratt, Bovis and Galliford Try.

Meanwhile banks who have signed up to offer the 75% mortgages include Halifax, Nationwide, Barclays and the Melton Mowbray building society.

Young buyers have been increasingly turning to financial help from their parents in order to secure their first home due to the need for large deposits.

Housing Minister Grant Shapps said: "With 80% of young first-time buyers depending on parental help, I am determined that we pull out all the stops to help those who want to take their first steps onto the property ladder."

Loans will be repaid on resale of the property, with the Government's share available for reinvestment in more affordable housing. The first homes are expected to come on stream in September this year.