Help to Buy scheme 'will boost housing market', says Linden Homes MD
The Government-backed Help to Buy initiative announced by the Chancellor this week will help more people get on the housing ladder, according to Devon-based housebuilder Linden Homes.
The new Help to Buy scheme has two components.
Option one expands the existing First Buy scheme to those looking to move up the housing ladder as well as first-time buyers. If you have a deposit of at least five per cent, the Government will provide a 20 per cent equity loan, meaning you only need to secure a 75 per cent mortgage.
The equity loan is interest free for the first five years and can be repaid at any time or when you sell the property. The £3.5bn scheme will run for three years from April and is available on new build homes costing up to £600,000.
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Option two is a mortgage guarantee scheme on both new build and existing homes worth up to £600,000, and will run for three years from January 2014. The Government guarantee is intended to encourage lenders to offer better access to low-deposit mortgages. It is available to both first-time buyers and existing homeowners.
Until now help has only been available to first-time buyers with family incomes below £60,000. Now help is available to all buyers of newly built homes on all incomes.
Nigel Palmer, managing director for Linden Homes, said: “We are looking forward to receiving the full details, however we are delighted to see yet another proactive initiative from the Government.
“We have seen other schemes work successfully up and down the country, including First Buy and NewBuy. These revised plans now open up the options for even more people to get on the ladder, or make that all important next step up.
“This support from Government will boost the national economy and the housebuilding industry, and help fulfil the demand for more housing in the UK. The revised income criteria will be well received by customers, who previously haven’t been eligible for the currently available schemes.
“We are also interested to learn more about the new mortgage guarantee system scheduled for 2014, which will help families who have previously wanted to take out a mortgage on a home but need some extra support.
“We believe this announcement will bring another welcome boost to general confidence, and get the housing market moving consistently in the right direction.”