David Cameron unveils part-ownership scheme with deposits as low as £1,400

Aspiring homeowners will be able to put down as little as £1,400 as a deposit on a house in some parts of the country, David Cameron will pledge today, announcing an expansion of schemes that allow people to part-own, part-rent their home.

From April next year 175,000 new homeowners will be able to make use of the schemes, as the Government puts an end to restrictions and red tape that have stood in the way of many, the Prime Minster will say.

Ministers want to one million more people to own their own home by 2020. Mr Cameron will also announce an £8m fund for councils to get “shovels in the ground”, preparing derelict sites for the construction of starter homes.

New measures to enable part-ownership will for the first time allow people to use the scheme more than once, enabling them to use capital gained from one part-owned property to buy a stake in a bigger one. Restrictions in some parts of the country that limit the schemes to people in certain professions or living in certain areas will also be scrapped.

The only pre-condition to entering a part-ownership will now be a salary of less than £80,000, and £90,000 in London, Mr Cameron will confirm. The new schemes could mean that some new homeowners in Yorkshire could put down a deposit as low as £1,400.

Speaking in the West Midlands, the Prime Minister is expected to say: “So many people are attracted to [part-ownership], especially those who thought they’d never have a chance of owning a home.

“But, because it’s been heavily restricted, many of those people have missed out. We’ve had local councils dictating who is eligible, based on everything from salary to profession to where the buyer comes from.

“From April next year, that will make 175,000 more people eligible for home ownership…It will be opened up to people of any occupation.”

The Local Government Association has criticised the Government’s housing strategy for failing to support affordable rental and social housing alongside home ownership, and have warned that reforms have taken billions out of council investments in affordable new housing.

John Healey, Labour’s Shadow Housing Minister, said: "There are over 200,000 fewer home-owning households since 2010 and tens of thousands fewer affordable homes to buy thanks to investment being slashed.

"The Spending Review revealed that the government is set to halve funding for affordable homes compared to the plans inherited from Labour. At the same time they are driving a Housing Bill through Parliament which will choke off low-cost homes, including for shared ownership.

"Families and young people on ordinary incomes who are struggling with high housing costs need a real plan for affordable homes to rent and buy, not just more hot air."