The government's £250m Starter Home Initiative (SHI) is helping up to 10,000 key workers, primarily health workers, teachers and the police, to buy homes in urban and rural areas where high house prices are undermining recruitment and retention.

Assistance is available to help key workers in London, the South East and housing hot spots in Eastern and South Western England. Assistance is also available through some SHI schemes to help social workers, care workers, fire fighters, transport workers and occupational therapists.

The assistance to help with house purchase is available up to March 2004.

Assistance is in the form of equity loans, interest free loans and shared ownership. The type and amount of assistance available varies from area to area dependent on the scheme being offered by local scheme managers.

If you are interested in applying for assistance, you need to apply to the scheme manager helping key workers in the area in which you work (not where you live). Application forms and details of the assistance offered by your local scheme can be obtained from the scheme manager in your area.

Scheme contact details are available on this site from the SHI home page and also the Housing Corporation's website at www.housingcorp.gov.uk

Key points about the scheme

• All applicants have to demonstrate that they cannot afford to buy a home without SHI assistance and that they would be able to sustain home ownership.
• Different schemes operate in different areas. The types of assistance largely fall into two categories:

1. interest free loans, including equity loans, to buy a property on the open market or a new build property being provided through the scheme manager. These loans are repayable if you sell the property.
2. shared ownership on a property purchased on the open market or newly built by the scheme manager.

• Scheme managers will let you know about the amount of assistance available.

Frequently Asked Questions

What does shared ownership mean?
Shared ownership refers to part own part rent schemes. These vary, but normally an affordable share e.g. 25% or 50% of the value of the property is purchased by the key worker and rent is paid on the share owned by the scheme manager.

Further shares may be bought until the home is owned outright. When further shares are bought the cost of purchasing these further shares will be on the basis of the value of the property at the time the additional shares are purchased.

What is an equity loan?
An equity loan is an arrangement whereby a lump sum contribution is made towards the purchase price of a property is given to the key worker. Instead of making monthly repayments on the loan, it is repaid when the property is sold.

The amount repaid by the key worker is the equivalent percentage of the value of the property at the time of the resale. For example, if £20,000 is provided as an equity loan and that represents 20% of the value of the property (assuming a £100,000 purchase price), when the property is sold 20% of the sale proceeds (ie the value of the property at that time) is returned to the scheme manager that provided the equity loan.

If I already own a property do I qualify for the scheme?
No, assistance under the SHI is restricted to first-time buyers. If you have already bought a property without assistance your will not be eligible for help under the SHI.

If I want to live outside the local authority area in which I work how do I apply for help under SHI?
You must apply to the scheme manager running the scheme in the area in which you work. SHI assistance is aimed at helping people live within reasonable travelling distance of where they work and this can include neighbouring local authority areas to the one in which they work.

If 2 key workers buy a house will they get two amounts of assistance?
No, only one amount of SHI assistance is available per house purchase.

Which organisations are running the schemes?
In most cases registered social landlords (RSLs) i.e. housing associations are running the schemes.

Why is the SHI almost entirely focused on teachers, police and health workers? What about other key workers?
Government subsidy to assist people into home ownership is limited and is being targeted under the SHI at alleviating recruitment and retention problems in teaching, the health service and police forces. However, some SHI schemes are also assisting social workers, fire fighters and transport workers.

Do I qualify for SHI assistance if I am a teacher working in the Further Education sector?
No, the assistance available for teachers is being targeted on the compulsory education sector.

Do I qualify for SHI assistance if I am a teacher working in a privately funded school?
No, the assistance is targeted on teachers working in schools that are publicly funded.

Am I eligible for SHI assistance if I am in the UK on a work permit?
Only key workers who have permanent leave either to enter or to remain in the UK may be considered for SHI assistance. Applications for indefinite leave by those on a work permit can be made to the Home Office once the key worker has been employed in the UK for 4 years.

Key workers from member states of the EU/ European Economic Area and those not subject to immigration control are eligible for SHI assistance in the same way as key workers from the UK.

If I'm not a key worker, can I qualify for any other assistance for home ownership?
Possibly, local authorities and the Housing Corporation run a number of schemes to support low cost home ownership. Some local authorities operate schemes, such as the Cash Incentive Scheme. You should contact your local authority direct to obtain details of schemes.

Other forms of help can include Shared Ownership and Homebuy. These schemes are run by Registered Social Landlords. For a list of Registered Social Landlords running these schemes contact the appropriate regional offices of the Housing Corporation.

If you are already a tenant of a local authority or Registered Social Landlord you may be able to buy the property you live in through the Right to Buy, Right to Acquire or Voluntary Purchase scheme.