New 'Ownhome' scheme to help key workers and first-time buyers onto property ladder

Government backed scheme to help bridge increasing gap between house prices and salaries

Following on from yesterday's announcement by Alistair Darling in the Budget, the Co-operative Bank and Places for People are delighted to announce they have been successful in the Housing Corporation's Shared Equity Competition.

As a result, Places for People and The Co-operative Bank, are launching an innovative new scheme, Ownhome, which will be available from 1 April 2008. This Government backed scheme will be available throughout England and is aimed at widening home ownership and increasing housing affordability amongst key workers, social housing tenants and first time buyers with an annual household income of less than £60,000.

Ownhome consists of two parts - a loan and a mortgage. Places for People will lend buyers between 20 and 40 per cent of the value of their new home, and The Co-operative Bank will offer a choice of any of their award-winning mortgages - fixed, tracker or discount - on the remaining 60 to 80 per cent.

Key benefits of the new scheme include:

• No payments on the equity loan from Places for People for the first 5 years

• No additional premiums or increased rates built into the Co-operative Bank mortgage

• No deposit needed, although the flexibility is available to pay one if the customer can afford to do so.

• Buyers will own 100% of their home, so there is no rent or landlord to pay

The Ownhome loan from Places for People will in effect top up the mortgage from the Co-operative Bank and enable many key workers to afford their first property. It will enable first time buyers to access a wider choice of housing, and will offer much needed help for those living in the most expensive regions.

Ownhome customers will not have to pay interest on the loan for the first five years. After five years there is a fixed interest rate of 1.75% p.a. on the Ownhome loan. From year eleven of the Ownhome loan the interest rises to a fixed rate of 3.75% p.a. for the remainder of the Ownhome loan period. The maximum Ownhome loan is £165,000, and applicants must be on a joint income of £60,000 or less.

David Cowans, Chief Executive of Places for People said "Ownhome would help thousands of cash-strapped first-time buyers and key workers such as nurses and police officers, currently struggling to afford a home".

"It is clear that more and more people want to own their own home, yet with average house prices now over £220,000, too many people have been unable to do so.

"Ownhome is great news for first-time buyers, and gives key workers or those with young families the opportunity to take those first important steps on to the property ladder.

"The Ownhome loan from Places for People will cover up to 40 per cent of the value of their property, with no interest to pay for the first five years, while the Co-operative Bank will provide a choice of mortgages to cover the remaining cost. There will no premium fees, or increased rates for Ownhome customers to pay on their mortgage, and no deposit will be required.'

John Barker, Head of Mortgages for the Co-operative Bank added:

"The Co-operative Bank is fully supportive of widening access to home ownership and is delighted to have been chosen by the Housing Corporation to launch a joint equity loan scheme in conjunction with Places for People. By offering our full range of competitive mortgages for the new Ownhome scheme, we will help provide key workers and first time buyers with the essential financial support needed to take their first steps onto the property ladder."

Funding for the scheme is limited and available on a first come first served basis. It is also subject to status and affordability.

Homebuyers can find out how Ownhome can help them onto the property ladder by calling Places for People on 0845 607 0110 or visiting

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