The £24 million Help to Own scheme, which has started with 12 new homes at The Marches development in Wednesfield, Wolverhampton, is targeted at key workers and others who are struggling to get a foot on the housing ladder.
In total 100 homes at the site off Lakefield Road have been bought for the scheme, which bosses hope will be rolled out across other parts of the West Midlands and further afield.
NHS staff and other key workers are among the first tenants of the scheme, which has been set up through a partnership between Wolverhampton Council, the West Midlands Combined Authority (WMCA) and Frontier Development Capital (FDC) Ltd.
West Midlands Mayor Andy Street, said: “It’s particularly encouraging that a large proportion of the homes are being allocated, as we always intended, to our incredible key workers and frontline NHS staff, who deserve nothing less for their service during the Covid-19 pandemic.
“Increasing the supply of affordable homes across the West Midlands is one of the WMCA’s key goals, and it is why we have pioneered a new definition of affordability that links prices to people’s income rather than the local housing market.
"Help to Own is a key part of our plans, and I look forward to working with our partners to roll the scheme out across the rest of the West Midlands as soon as possible.”
Aaron Parsons, who works in manufacturing and Timothy Perry, a press operator, moved into their new home as part of the scheme two weeks ago, having previously lived in a one-bedroom flat after spending time sofa-surfing.
They applied for the scheme six months ago after initially thinking it was "too good to be true"
Mr Parsons, aged 32, said: “Saving for a deposit whilst renting is really challenging, even though we both work full time, so The Help to Own scheme sounded like the perfect opportunity to get to where we wanted.
“Now we’re in our new home it is like a weight has been lifted. We’d recommend the scheme to anyone who’s facing challenges to get a home they love and find a way on to the property ladder."
Under the scheme, tenants build up a loyalty premium as they make monthly payments, which can be taken as cash if they leave within 20 years.
After 25 years they can buy their home for £1.
Councillor Steve Simkins, Wolverhampton Council's deputy leader and city economy chief, said the council had put £5.7m into the scheme as part of its commitment to provide better homes for all in Wolverhampton.
He said: "The housing market is fractured, so we have come up with a scheme where people can actually afford to live in high quality housing.
"Housing is a key priority for us, and we are always looking to work with partners to improve housing options in the city.
"Our great city is growing and we should be proud to be part of this ground-breaking scheme."
Sam Miller, from FDC, Commercial Director - New Propositions at FDC commented: "We’re thrilled to see that our scheme is offering a genuine alternative to hardworking households looking for a better solution to saving for a deposit when facing ever-increasing house prices and sky-rocketing rents.
"The response since launch has been incredibly positive, and with strong demand outside of Wolverhampton and the West Midlands, our mission to make the route to home ownership more accessible nationwide has never been clearer or more pertinent."
Help to Own is available to anyone who is struggling to get on the property ladder, subject to affordability and credit checks.