Chichester District Council and HydeMartlet – the non profit-making company which owns former council housing stock in the district – have developed the 'gateway loan' scheme to support people in their efforts to get on the property ladder.

Selsey residents will be given priority, although anyone living in the Chichester district will also be eligible to apply for a loan if they want to buy a new-build home at St Wilfrid's Place, Selsey, but can't quite afford the full purchase price.

"The pioneering scheme allows a buyer to take out a conventional mortgage to the maximum level they can afford, and then take out a gateway loan for the remainder – up to 25 per cent of the property value," said a statement.

Applicants able to raise the full purchase price of the property through a mortgage were not eligible.

Specialist loans provider ART Homes Ltd, of Birmingham, would administer the equity loans on behalf of the council.

"The gateway loan requires no monthly repayments, and interest is not 'rolled up' on the loan account.

"When the property is purchased, the loan is expressed as a percentage of the property value. When it is sold, the property is revalued and the home owners have to pay back the original percentage at the property's new value," the statement explained.

"For example, the minimum loan available is 10 per cent of the value of the property. If a loan of £10,000 is taken out on a property with a value of £100,000, and the property has gone up in value to £150,000 at time of sale, the home-owner must repay £15,000.

"If the value of the home has decreased, the homeowner has to repay the original loan amount."

The council allocated up to £500,000 to fund the scheme, which takes the form of a second charge on the property. The first charge is the buyer's mortgage.

Council portfolio holder for housing, Cllr Melva Bateman, said: "This top-up interest-free loan could make all the difference to someone who wouldn't otherwise have the chance to buy a home of their own."

A launch event will be held at St Wilfrid's Place, Selsey, on Saturday, March 29 from 10am to 4pm and Sunday, March 30 from 10am to 1pm.

Representatives of the council, ART Homes Ltd, and HydeMartlet will attend the open days.

More information is available from Sue Randall, at HydeMartlet on 0800 085 4195 (info@hydemartlet.co.uk) or Linda Grange, district council housing enabling manager, on 01243 534582.