Help to Buy
In the Budget the Government announced its two-pronged Help to Buy scheme – this aims to address the lack of mortgage finance in the market and increase supply by increasing effective demand.
The first part of Help to Buy – Equity Loan – has been hugely successful in boosting output. In the first 5 months it has helped 12,500 people realise their ambition of home ownership. The scheme is on course to deliver the planned 74,000 units over 3 years. There has been real appetite for this part of Help to Buy and housing starts are increasing in response.
The second part of Help to Buy – Mortgage Guarantee – was due to be introduced to the market in January 2014, however, the Treasury brought the scheme forward so it will be available from 10th October 2013. Natwest, RBS, Halifax and HBOS will be the first lenders to begin offering mortgages under the policy. Virgin Money has signalled their intention to join Help to Buy in the new year – HSBC are expected to sign up before 2014. Phase 2 of Help to Buy is applicable to both new builds and second hand homes. At the moment it is unclear what scheme take up will be as we still await details of the conditions and lender fees that will apply. Clearly it has the potential to assist credit-worthy purchasers boost sales across the market, and as a part of that new build should benefit.
On the launch of the scheme the Prime minister said:
“Too many hardworking people are finding it impossible to buy their own home - people who can afford the monthly mortgage payments but haven’t got rich parents and can’t pay the deposit up front.”
“There is a need for Government to act. Buying your first home is about far more than four walls to sleep at night. It’s somewhere to put down roots and raise a family. It’s an investment for the future. Above all, it’s a sign that everything you’ve put in has been worth it.”
Click here to view the Factsheet for Builders
Click here to sign up for the scheme (from HCA website).