The concept of shared equity is that you buy a portion of a property and rent the rest. Local authorities and house builders can offer shared equity homes. You still need a deposit to put down for your purchase, but it is less than normal because it is only for your share of the property.

You will need a mortgage for your share of the property too. For this you'll be searching for shared equity mortgages. At a later stage, when you are able to afford it, you will be able to buy the remaining equity in the house, but it will be at market prices at that time.

The main advantage of a shared equity purchase is that it can get you on the property ladder earlier than you might otherwise be able to afford. In fact, the overall cost of buying in full through such a scheme is no cheaper than a regular purchase. However, it does help those people without sufficient income to satisfy the requirements of a mortgage lender and get themselves a home.

In 2006 the government launched the Open Market HomeBuy scheme (OMHB). Its the aim was to help first-time buyers get into the housing market, particularly targeting key workers such as teachers, nurses, fire fighters, police officers, assisting them to get shared equity mortgages. It is a system of shared equity mortgages, allowing applicants to buy the home they would like without any deposit and a mortgage for only 75% of the value of the property. The remainder is made up of two loans under the scheme: the first is from the mortgage lender, and the second is from the government. These come with fairly reasonable terms, such that the loan from the lender has no charges for the first five years, and then a small interest charge is applied. The government's share has no charges for the full period of the mortgage.

Yorkshire Building Society (YBS) is one financial institution that has said that it will put over £100m towards properties bought via the OMHB scheme. Other lenders in the scheme are Nationwide Building Society, HBOS and Advantage mortgages. According to YBS the average price for an OMHB property is £160,000, and mortgage payments on their scheme are paid on three quarters of that: £120,000.

So far YBS has lent more than £100m to about 700 buyers, making an average loan of around £140,000. The other lenders who are involved in the scheme have not issued any figures. The government has a target of helping 6,500 buyers a year buy their first home, so there is probably a long way to go.

YBS are pleased to contribute to the key workers in British society, and say it fits well with their origins of assisting people to buy homes. Key workers have been left behind in the property market in many areas, and shared equity mortgages give them great opportunities.

Innovative mortgage solutions are always needed to help first-time buyers get on the property ladder, and lenders have to look at ways to make the market more affordable as schemes from the Government cannot always be relied on to assist buyers in the difficult housing market.

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