UK government offers help to first homebuyers

Young British house buyers and workers in key but lower-paid sectors such as nursing are to be helped get into the pricey property market in a government initiative launched on Monday.

The Labour party, which inherited a rising market when it came to power in 1997, has seen prices double in places, to take the market beyond the reach of many people, particularly in southern England.

"Sons and daughters can't afford to live where they were brought up," Deputy Prime Minister John Prescott told the House of Commons.

"Nurses and teachers can't afford to buy homes near where they work. As house prices rise, more people are priced out of the market. This is not just a housing problem - it's a matter of fairness, opportunity and social justice."

Under the plan, up to 300,000 council and housing association tenants in England would be able to buy an equity share in their home at a discount.

The government expects 80,000 families to be able to buy a home by 2010, Mr Prescott said.

"By offering more people the chance to own or buy a share in their home, we will widen opportunity and narrow the wealth gap between those with housing assets and those without," he said.

The plan also includes a competition to get house builders to construct environmentally efficient, quality homes for £60,000.

The opposition Conservative party accused Tony Blair's government of causing the housing crisis for first-time buyers.

"Mr Blair has introduced a series of stealth taxes on housing with council tax up by 70 per cent since 1997 and an extra £1,200 in stamp duty on first-time buyers," Caroline Spelman, Shadow Secretary of State for Local Government, said.

"Rising inheritance tax and the abolition of mortgage interest tax relief have all combined to help kick a generation off the housing ladder."

Economists say British mortgage lending and approvals remain weak, with most of the latest evidence pointing to subdued activity and softer house prices due to higher interest rates.