Attempts to open up a key worker housing scheme to more social
workers are being undermined by a reduction in the number of key
workers to be helped by the initiative.
The Office of the Deputy Prime Minister said that new measures to
provide key workers with larger loans under round two of the
Starter Homes Initiative meant it would no longer reach its target
of helping 10,000 people by April 2004, unless extra money was put
into the scheme.
As a result, moves to encourage housing associations and councils
not to stick rigidly to their allocations for each key worker group
will have only limited impact. Under original allocations only a
small number of spaces were allocated to social workers.
The government has decided to increase the loans available because
of house price increases, which it feels lie behind the scheme’s
low take-up rate to date – only 3,000 people had received loans by
The measures will mean that the maximum subsidy that housing
associations can provide in the £20m round two scheme will be
increased from £10,000 to £20,000. The government had
hoped to help 8,000 key workers buy their first home under the
£230m round one scheme, under which housing associations could
be flexible about the amount of subsidy offered.