Video: Housing set to benefit from £1bn Govt boost

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Government chiefs say a £1 billion housing package unveiled today will provide a much needed boost to the house-building industry.

The funding, which will see 5,500 new affordable homes built, will help first time buyers struggling to get on the housing ladder and support vulnerable homeowners at risk of the repossession.

Ten thousand first time buyers whose household income is under £60,000 will be offered an equity loan of up to 30 per cent of the value of a new-build property.

Meanwhile £400 million will be brought forward from 2010/11 Housing Corporation funding to build 5,500 new affordable homes over the next 18 months.

A £200 million mortgage rescue scheme will also be introduced to support 6,000 of the most vulnerable homeowners facing repossession of their home.

Communities secretary Hazel Blears said: "By bringing forward our investment in social housing, we are both getting more decent, affordable housing ready for people to live in sooner, and helping the house building industry weather tough times."

Richard McCarthy, director general for housing and planning for Communities and Local Government said: "There are house builders and construction firms out there able and available to build homes.

"What we are doing is putting together packages to help them."

Simon Storer, external affairs director of the Construction Products Association, said: "The extra funding for social housing is welcome but the Government target is to deliver 45,000 social housing units this year and they are way off that at the moment.

"Does this mean they are still committed to that target? The initiatives are welcome as far as they go but they do not address the central issue of liquidity in the market."

Meanwhile the Chancellor of the Exchequer Alistair Darling announced today that stamp duty will no longer apply to purchases of residential property of £175,000 or less.

Also the Department for Work and Pensions announced it will be reforming Income Support for Mortgage Interest by shortening the waiting period before SMI is paid from 39 weeks to 13 weeks for new working age claims from April 2009.