New move to help key workers find homes

TEACHERS, nurses and police officers in the high cost housing areas of East Anglia will be able to apply for an interest-free loan designed to give them a step onto the property ladder.

TEACHERS, nurses and police officers in the high cost housing areas of East Anglia will be able to apply for an interest-free loan designed to give them a step onto the property ladder.

The new government initiative was welcomed in the region last night and hailed as a way of keeping essential public sector workers in areas of rocketing house prices.

Deputy Prime Minister John Prescott announced yesterday that the Key Worker Living programme will give loans of up to £50,000 to help people in frontline roles buy their first homes or move into their first family homes. Those who want to rent rather than buy will also receive subsidies.

A spokeswoman for the Office of the Deputy Prime Minister John Prescott said the scheme would be open to people working in parts of Suffolk and Essex, with each application assessed independently according to the need of the people who apply.

Lord Hanningfield, the Conservative leader of Essex County Council, said: “We have terrible difficulties in recruiting and retaining teachers and other key workers in Essex because of the cost of housing.

“The nearer you get to London, the bigger the problem and this initiative may go some way towards helping staff.”

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Bryony Rudkin, Labour leader of Suffolk County Council, said: “For our teachers, social workers and firefighters, anything that offers a helping hand and enables them to live and work in our communities instead of having to go elsewhere is good news.

“The East of England is one of the areas which has seen high house price rises and this may also help us attract key workers, who may have thought they couldn't afford property prices in Suffolk.”

But Jerry Glazier, Essex general secretary for the National Union of Teachers (NUT), questioned whether the loans would be enough to combat “rampant” house price rises.

He added: “The house prices have more than tripled in the last 10 years, which has made affordable housing out of the reach of many teachers.

“I do welcome anything that the government tries to do to address that, but what's important is that the amounts are realistic.”

Martin Goold, NUT county secretary for Suffolk, said: “It underlines the problem of public sector pay and perhaps it's a recognition that pay is inadequate. Perhaps they should look at pay instead.”

He added: “Obviously this is going to be helpful but it's a sign of the problem rather than a solution.”

Jan Rowsell, spokeswoman for Ipswich Primary Care Trust, described it as a “great initiative” that would benefit newly qualified nurses the most.

Bob Russell, Liberal Democrat MP for Colchester, said he had problems with the definition of a “key worker”.

He added: “It is an arbitrary decision. While it is true that doctors, teachers and nurses are essential to our lives so are the people who empty our bins and drive our buses.”

Yesterday it was unclear how far the scheme would extend into Suffolk, with suggestions that it would exclude people working in the areas of St Edmundsbury and Forest Heath.

Bury St Edmunds Tory MP David Ruffley said that there was an urgent need for extra help for the public sector workers in his constituency following the “colossal” house price rises.

He said some health workers at West Suffolk Hospital in Bury had been forced out of their communities and instead commuted for over an hour each day from cheaper housing areas in Norfolk.

Liz Pettman, chairman of the Police Federation in Suffolk, said that the scheme could cause difficulties in retaining and recruiting officers in Suffolk if they do not receive the same degree of financial support as those working for other counties.

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nHow the loan works:

n The equity loan has a limit of £50,000.

N People who take out the loan will not have to make monthly repayments and instead they repay the loan when they sell their property or stop being a key worker.

N At that time they would need to repay a percentage of the property's value. The percentage would be the same as the percentage of the purchase price the equity loan covered.

N For example, a loan of £40,000 used to buy a home for £160,000 would represent 25% of the purchase price. When the property is sold, or if the buyer stops being a key worker, then 25% of its value will have to be paid back.