Jill and Bob Aitken are finally moving into their own home in Dunedin. Picture / Sharron Bennett
The Government is considering an innovative new shared equity scheme targeted at first-home buyers squeezed out of the market by high prices.
The bold new proposal, aimed mainly at those living in major metropolitan areas, could be unveiled as early as next year's Budget - and would see the Government
or a private sector partner take a chunk of equity in a house, perhaps around 30 per cent, with the homeowner taking out a mortgage to finance the rest.
The scheme would follow an announcement expected today from Housing Minister Chris Carter of a significant expansion of the Welcome Home loans initiative aimed at low-income people who can't afford a deposit.
Under the Welcome Home mortgage insurance scheme, low-income, first-time home buyers can borrow up to $150,000 without a deposit, with the Government acting as guarantor. With a five per cent deposit, they can borrow up to $280,000.
Today's changes will see an increase in the no-deposit limit and a decrease in the amount of deposit required for loans above that limit.
At the moment, the scheme only allows access to the bottom 11 per cent of total house sales, but the Government hopes today's changes will double its reach.
The changes are intended to give families who can't afford a deposit access to the lower rungs of the property markets in 42 of the country's 74 territorial districts - including Christchurch and Dunedin.
The scheme was designed for couples like Jill and Bob Aitken, who have lived for the past 11 years in a state house in Mosgiel. With a Welcome Home loan arranged over the last few weeks, the couple are this weekend moving into their own house in the Dunedin suburb of Carlton Hill.
Jill said they had always wanted to own their own home but had given up on the idea because of their age.
"Both me and Bob are 50ish and borrowing 100 per cent is almost impossible when you're our age."
She said the scheme seemed tailor-made for working people like them who could service a mortgage but couldn't scratch together a deposit.
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