13 June 2003
A £250m scheme to help public sector workers find homes in high-cost areas will fail to meet its target of assisting 10,000 people by next April, says the Office of the Deputy Prime Minister.
Rising house prices outside London have been blamed for the fact that so far just 3,000 key workers have been housed under the Starter Home Initiative.
Loans of £10,000 offered to workers through housing associations were not sufficient to get people on to the property ladder, the ODPM admitted this week. Instead, maximum loans outside London will be doubled to £20,000.
Larger loans will mean that cash support is spread less thinly, although workers in London will continue to receive average loans of £30,000. 'It probably means that we won't hit 10,000 [key workers] but we will spend all the money,' said a spokeswoman.
Since the SHI was launched in September 2001, housing associations have found homes for about 1,300 teachers and 1,100 health workers. The target is to help 3,500 teachers and 5,000 health workers. Police officers, firefighters and other workers such as bus drivers are also eligible. But the ODPM said some landlords have been offering homes only to certain types of key workers.
Dino Patel, London policy officer for the National Housing Federation, said quotas were based on government guidance. But he welcomed the higher loans. 'They will go some way towards helping people bridge the gap between earnings and house prices.'
The SHI has been criticised by social landlords for encouraging workers to purchase existing homes rather than facilitating the building of new ones. After its launch, the government announced that half of the 8,000 homes to be built in London and the Southeast using the Housing Corporation's £300m challenge fund would be for key workers.
PFjun2003
