Despite complaints from public sector workers that they cannot
afford to work in London and the South East, a government scheme to
help “key workers” on to the property ladder has had limited
The £250m starter home initiative aims to help 10,000 public
sector workers buy their first homes by March 2004. But by the end
of February this year, only 2,238 people had been helped to buy a
property – an average of just over 124 completions a month since
the scheme started in September 2001. This is about one-fifth of
the 595 monthly completions required to reach the target.
Initial bids were put forward by housing associations, based on
local recruitment and retention difficulties in key worker
professions, and evaluated by the Office of the Deputy Prime
Minister and the Housing Corporation. Each council received
funding, but most was allocated to teachers, police officers and
nurses, with social workers left to fight over the remaining 389
A spokesperson for the ODPM says housing associations are now
achieving about 250 completions a month. They attribute the low
completion rate in part to the failure of local employers in some
areas to successfully market the scheme.
Some local authorities blame the poor uptake on the dubious value
of the financial assistance.
Help available under the scheme varies between housing associations
and includes interest-free loans, shared ownership options and,
more contentiously, equity loans.
The interest-free loans involve no monthly repayments and have to
be paid back when the property is sold. Shared ownership options
involve buying a percentage of the home and renting the rest from a
social landlord, although this can still prove costly in expensive
With equity loans, although there are no monthly repayments, when
the property is sold the loan must be repaid as a proportion of the
house’s value. So if someone receives £30,000 towards a
£100,000 property and it is sold 10 years later for three
times that (£300,000), they will have to pay back three times
the sum of the original loan (£90,000) – far more than the
interest and repayments on a bank loan of £30,000.
As a result of the initial bids, Brent Council in London was
allocated places for eight social workers on the scheme, and
offered an equity loan of up to £35,000. None of the places
has been taken up and the council is no longer convinced of its
value. “We are not actively promoting it anymore because we don’t
want social workers to feel that we have caused them to be ripped
off,” a spokesperson says.
Of the 48 social work places allocated to Notting Hill Housing
Group, one of the four housing associations responsible for running
the scheme in London, there have been only four completions. In
Hampshire, only two of the 13 equity loans allotted for social
workers have been taken up.
In many areas where there are high social worker vacancy rates, no
social worker places have been allocated to the scheme at all. Some
councils have said this is because they were unaware social workers
The government insists it has no fixed definition of “key worker”
and that it is up to local authorities to submit bids for other
groups according to local recruitment needs.
Ian Johnston, director of the British Association of Social
Workers, says: “Despite government rhetoric about acknowledging the
complex and vital nature of social work, when issues like this
arise social workers seem to have a lower profile than other