A SCHEME to help young people in the Yorkshire Dales set foot on the property ladder has been welcomed by a range of organisations.

Working groups will now look into details of setting up a home equity fund and assess what investors and buyers would want from the project.

The idea was outlined at a launch at the Dales Countryside Museum, Hawes, on Wednesday.

Dr Peter Annison, chairman of Richmondshire Local Strategic Partnership, who has worked on the idea for four years, said the scheme would help young people unable to afford homes in the upper dales.

The buyer would raise a mortgage for at least half of the property value and the fund would make up the balance from money privately invested. Investors would gain interest as property prices rose.

"Shared equity schemes are not novel; housing associations run them but they are funded mainly by public money from the Housing Corporation," said Dr Annison. "Property prices and the scale of the affordable homes problem means the amount of money available from the Government through the Housing Corporation is now totally inadequate so we have looked further afield, to the private investor."

Initial soundings showed there was a keenness among more affluent people in the area to invest in a scheme to help key workers and young families stay in the Dales.

The creamery at Hawes had to bus in workers from towns as far away as Bradford because of recruitment problems linked to high property prices.

At least two businesses had pulled out of Wensleydale because they could not recruit staff owing to the housing cost. Ripon Travel closed its Leyburn branch for the same reason.

A feasibility study into the equity fund idea showed homes in a decent condition cost at least £120,000 - pushed up by second home and retirement home owners - and typical local incomes ranged from £10,000 to £20,000.

Graham Martin, a housing consultant who carried out the study, said 27pc of homes in the upper dales were second homes or holiday cottages and 75pc of people buying property in the area were from outside the Yorkshire Dales.

Investors would expect a good return on their cash and potential buyers interviewed seemed willing to pay extra to top up a conventional mortgage.

"It seems that we can marry the investment to the needs of local house buyers and there seems to be a fit between what people are willing to invest and what prospective buyers need," said Mr Martin.

With low returns on conventional types of investment, the scheme would enable people to invest in property without becoming landlords.

Details to be ironed out include the minimum investment sum and term, the criteria for selecting buyers for the scheme and how the public sector could help build up the initial cash needed to launch the project, which would eventually be self- financing.

One source of public money could be the scrapping of the 50pc council tax discount for second home owners. Richmondshire District Council is to drop this to 10pc, the lowest allowed by the Government, from April.

Harry Tabiner, the council's chief executive, welcomed the scheme but said a lot of work still needed to be done before it was up and running.

"I believe we are talking about the sustainability not just of this rural area but of many rural areas around the UK," he said.

A cautionary note was sounded by stockbroker Peter Knowles, who said investors would only take part if they gained a tax break and a decent return on their money. "Investors want to make money, they are not charities," he told the meeting.

Coun Yvonne Peacock, who represents Bainbridge on Richmondshire District Council, said any investment in housing in the upper dales would give a healthy return, as few new homes were built in the deeply rural areas.

"A lot of people would put money in, hoping it could stay there for 20 years," she said. "£35,000 invested in a house in the upper dales now would soon turn into £100,000."

Gavin Graveson, of the Two Dales Partnership, the community investment group for Swaledale and Arkengarthdale, said many wealthier, older people were keen to invest in their own communities.

Four task groups were formed following Wednesday's meeting to investigate investment management, property management, borrowers and the public sector contribution.

They will report to the steering group, which meets again on April 1 to present its findings.

* Copies of the feasibility study, How to Buy Half a House, are available from the web site digitaldales.co.uk/AHE or tel 01969 650525