Last updated 19:37, Thursday, 17 April 2008

New measures to help first-time buyers and key workers onto the housing ladder have been revealed by the Government.

A helping hand: The Government’s £1,500 grant will be offered to social tenants, key workers and certain first-time buyers who take part in the Open Market Homebuy scheme

It will take the form of £1,500 grants to help buyers with costs such as solicitors’ charges and furniture.

The Government said more than £3m has been allocated for the grants – enough for 2,000 people.

The grants are to run in conjunction with a part-buy scheme offered to key workers and certain first-time buyers.

The grants will be offered to buyers who take part in the Government’s Open Market Homebuy scheme (OMHB).

Under the OMHB, qualifying buyers take out a mortgage for a percentage of their home and then another loan – known as a shared equity loan – from the Government and lenders to pay for the balance.

Those who qualify include social tenants, key workers and some first-time buyers.

There are currently two OMHB shared equity loan products offered by the Government, offering loans of between 15 per cent and 50 per cent of the total cost of the property.

To promote the scheme, Prime Minister Gordon Brown visited one homeowner in Archway, north London, who had received a £27,250 deposit to buy a one-bedroom ex-council flat.

Mr Brown said: “I want key workers, like nurses and teachers, to be able to get a foot on the property ladder. Shared equity housing schemes make that possible.”

The Conservatives have opposed plans, calling them a “smokescreen”.

Shadow Housing Minister Grant Shapps said: “This is just a smokescreen to cover up Labour’s botched housing policy.

“The incredible thing is that stamp duty for first-time buyers is already nearly £1,700, so the money pledged won’t even cover that cost.”

The Tories also criticised the Government for bringing in Home Improvement Packs (HIPs) – a cost they say will be borne by buyers.

Instead, said Mr Shapps, the Tories wanted to increase the stamp duty threshold for first-time buyers to £250,000, claiming this would enable nine out of 10 buyers to avoid the tax.

Meanwhile, Housing Minister Caroline Flint said she will continue meetings with the Council of Mortgage Lenders and Treasury ministers to discuss how to help borrowers struggling with mortgage payments.

In addition the Government will shortly confirm locations of surplus public sector land to be used to build 30,000 new homes across England.

National regeneration agency English Partnerships will outline which brownfield sites, such as former coalfields and surplus local authority land, will be used.

Developers who bid for this land will have to build a high level of affordable housing.

The Government has pledged to build an extra 200,000 homes on surplus public sector land by 2016.