08 August 2003
Key workers in London and the Southeast are to be urged to snap up properties through the Starter Home Initiative before it is too late.
To date, 3,300 workers have been housed under the £250m scheme, well below the government's initial target of 10,000. Less than £100m has been spent so far, and the remaining £150m cannot be used in the next financial year.
The Office of the Deputy Prime Minister has admitted it is unlikely to help 10,000 people from vital sectors, such as nursing and teaching, into home ownership by next March, when the initiative is due to end. But it wants to get as close to the figure as possible.
A three-week publicity campaign will run on regional radio from late August, targeting teachers, health service staff and other workers who find it hard to get on to the property ladder.
The ODPM blamed rising house prices outside London for the slow take-up during the first 18 months of the three-year scheme. Key workers outside the capital are now eligible for loans of up to £20,000 while London workers continue to receive average loans of £30,000.
Deputy Prime Minister John Prescott, who visited a key worker housing scheme in Surrey on August 5, warned that purchase and final exchange must be completed by March 2004.
'I urge key workers who are thinking of purchasing a home of their own to apply for funding now,' he said.
Some Whitehall sources blame housing associations for the shortfall, claiming that they have failed to promote the scheme and placed unnecessary restrictions on those who can claim help.
The continuing increase in house prices has also meant that lower-paid staff struggle to get on the property ladder even with the help of the loans.
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