This is just for starters

First-time buyers are getting their stamp duty paid by builders in a bid to kick-start the market.
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A studio at the Great West Quarter, Brentford
From £199,995: a studio at the Great West Quarter, Brentford, benefits from Barratt's Head Start scheme (020 8688 0688)
First-time buyers will have exciting opportunities to buy their own homes this autumn as housebuilders step in to do what Chancellor Alistair Darling has so far failed to do — kick-start the property market with money-saving incentives.

Millgate Homes has become the first developer to guarantee buyers a refund of the unpopular tax should the Government scrap the duty any time during the next 12 months.

"Buyers are holding off because they don't want to risk losing out if the duty is abolished or deferred," says Jonathan Cranley, director of Millgate. "We're hoping this move will reassure hesitant buyers."

For first-time buyers, any help with the extra costs involved in buying a property is welcome — stamp duty kicks in at three per cent on homes priced more than £250,000.

But most are still struggling to buy, despite price cuts, because they cannot muster a big enough deposit, and lenders have withdrawn 100 per cent mortgages, meaning that buyers commonly need savings of at least £25,000. In London the average deposit is nearly £45,000, according to lender Halifax.

Another good idea

The Government is under pressure to adopt a national home-deposit savings scheme proposed by David Pretty, former chief executive of Barratt Developments and now chairman of the New Homes Marketing Board.

Bloomsbury Terrace, WC1
Bloomsbury Terrace, WC1, where shared-ownership homes start at £180,000. Call English Partnerships on 020 7631 3675
Under Pretty's plan, buyers would make monthly savings for up to five years to accumulate a maximum of £20,000, at which point they would receive a 25 per cent tax-free bonus, bringing the possible total to £25,000.

"This final amount would cover a typical 10 per cent deposit, together with stamp duty, legal fees and removal costs. Also, the plan would reward old-fashioned savings habits, something we need now that the days of easy credit are gone."

Mainstream shared equity

Shared-equity schemes that allow borrowers without a deposit to own 100 per cent of a new home but take out a mortgage for just 75 per cent of its value are spreading to the mainstream.

Linden Homes, Taylor Wimpey, Bryant Homes, Bovis Homes and Barratt are all offering this incentive.

Mortgage brokers say first-time buyers should welcome these deals as they are not sales gimmicks and reduce exposure to negative equity.

"The main advantage is that there is no interest to pay on the 25 per cent loan for a number of years," says Melanie Bien, director of Savills Private Finance.

Moreover, as buyers owe a percentage of the property value, rather than a fixed sum, if house prices fall by the time they sell, they will have to pay back less than they borrowed — 25 per cent of the value of the property at that time.

Barratt's Head Start deal is available at numerous developments across London and the Home Counties. Buyers pay 75 or 85 per cent of the purchase price plus stamp duty and legal fees. The remainder is deferred interest-free for up to 10 years or paid back when the property is sold. For more information, call 020 8688 0688.

At Bloomsbury Terrace, WC1, prices start at £180,000 for shared-ownership homes, part of a deal with government agency English Partnerships. For information, call 020 7631 3675.

Parent power

Even before the credit crunch, a record number of first-time buyers were turning to their parents for help. In 2007, 14,000 parents released equity averaging £74,000 from the family home to enable their adult offspring to get on the housing ladder, according to the Department for Communities and Local Government.

The Glass House in Maidenhead
The Glass House in Maidenhead, where Barratt's Head Start scheme (as before) helps first-time buyers purchase part of their new home
Such cash assistance is likely to be the tip of an iceberg, say brokers.. Remortgaging aside, many parents raid savings, cash in stocks and shares, use inheritance windfalls, even credit cards, to pass on money to their children. A study by mortgage lender Direct Line concludes that there are 327,000 "handout homes" in the UK, a quarter of which have been purchased by parents for their student sons and daughters.

Releasing equity can be a sensible solution for parents, especially those keen to avoid inheritance tax liabilities. Increasingly, though, parents are biting the bullet because the alternative is stay-at-home kids who are an ongoing financial and emotional drain on their resources.

Demographers have coined the term "kippers". These are people who remain in the parental home after becoming an adult. Kippers is an acronym for Kids In Parents' Pockets Eroding Retirement Savings. Less than half of the estimated 6.8 million kippers in the UK pay rent. Many are aged over 30.

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