Q&A: housebuying help

What is the latest scheme?
The chancellor, Gordon Brown, has set out details of a deal between the government and mortgage lenders to help around 100,000 families buy their own home. Under the scheme, known as Open Market Homebuy, first time buyers will purchase a share in the value of a home - typically between 50% and 75% of its value - with a conventional mortgage. The rest of the equity will be split between the government, probably through a loan administered by housing associations, and lenders. Buyers will pay a rent of more than 3% on the share they don't own. They will also get a chance to buy the home outright if their fortunes change.

Is it a good deal?
Monthly mortgage costs would be up to 30% less than conventionally purchased homes. But when it comes to selling the home, purchasers will only benefit from rising property values on the share that they own.

Who is it for?
Any first time buyers who can afford this cut price mortgage but can't afford a conventional one. It will not be means-tested or restricted to keyworkers, but public sector employees such as nurses, teachers, social workers and police officers are being targeted as some of the main beneficiaries.

How will key workers be targeted?
One option is that the government could offer extra subsidy to the cost of the share owned by lenders if keyworkers are involved. This would reduce the amount of rent that the keyworkers have to pay at least in the first years after homes are bought.

How many people will it help?
At the moment around 8,000 households each year are given government help to own or part buy and part rent their homes. The Council of Mortgage Lenders reckons there is scope to increase this to 42,500 a year. The government is talking of helping a total of 100,000 households.

What is different about Open Market Homebuy?
By helping to underwrite housing costs, the government is trying to boost a new commercial market in shared equity schemes. By kickstarting a new lending market, the government hopes to help thousands more households than it can by handing out individual loans to key workers or grants to housing associations.

What other help is available for keyworkers?
Last year, the government launched its ?725m Key Worker Living scheme aimed at housing more than 16,000 public sector employees by 2007.

What's on offer?
Equity loans of up to ?50,000 to help key workers buy homes on the open market. And for potential headteachers in London loans of up ?100,000 are available. When the house is sold the amount of the loan paid back depends on what stake the loan initially covered. For example, if a ?50,000 loan paid a third of the initial price, a third of sale price would have to be repaid.

What else?
Shared ownership schemes where key workers buy a share of a home and pay rent to a housing association on the share they don't own. Housing associations have also been given grants to provide homes on "intermediate rents" - below market levels but above traditional social housing levels.

How is the scheme progressing?
The scheme got off to a slow start with many complaining that it was too bureaucratic. But it is beginning to pick up now. So far 4,015 key workers have been housed. A further 12,000 will have to be helped in less than two years if the government is to meet its target for the initiative.

Is there any other government help for would-be home owners?
Confusingly there is also the First Time Buyers Initiative aimed at building 15,000 cheap homes for sale by 2010. This scheme uses government owned land to subsidise the cost to the buyer.

Is that it?
No, there is also "social homebuy", which could help up to 300,000 council and housing association tenants buy a share in the value of their homes. It aims to build on the success of the right to buy council homes, which of course is also still available.

What's the government up to?
Since the 1990s the level of home ownership has remained stable at around 70%. In its manifesto, Labour pledged to break through this level by promising that one million more people would own their own home by the end of the parliament, to take the proportion of owners to 75%.

Why the sudden interest in home ownership?
Until recently the promotion of "a property owning democracy" was a strictly Tory ambition. But now Labour has caught on to the popularity of home ownership. It is all about asset-based welfare, according to Labour's policy wonks. This is the idea of helping individuals take more responsibility for their own well-being. In theory people will require less state help if they can draw on their own assets.

What do housing experts think?
There is a concern that the new focus on property ownership will be made at the expense of homeless families and that traditional social housing will be further marginalised. Housing charities like Shelter fear that money previously earmarked to build traditional rented social housing will be siphoned off to pay for increased home ownership. The National Housing Federation, which represents housing associations, said today "mortgage subsidies are not a substitute for more investment in new homes".