The Chancellor’s new Firstbuy Direct Scheme offers first time buyers interest free loans for deposits on new build properties. The government and house builders will jointly provide a 20% loan to top up first time buyers’ deposit of 5%, allowing them to obtain a mortgage for 75% of the property value.
Loans will be repaid when the property is resold and are interest free for the first five years.
Conveyancing Partner, David Walton, explains “It is hoped that this will help those looking to get on the property ladder for the first time and make a difference to the market, which is still finding it difficult to overcome lending constraints. Lack of access to finance has been a major stumbling block to first time buyers over the last few years.”
The scheme will also give a boost to the building industry. The Royal Institute of Chartered Surveyors has welcomed the news saying that “access to equity loans could help many people who thought they were locked out of home ownership take their first step on the housing ladder. Opening up the housing market to first time buyers will be essential to help support economic growth. This is a key area as the lack of mortgage lending has significantly reduced the number of homes being bought and sold which in turn has led to low house building levels. Although this would not be a solution to all housing problems this could represent the first step towards a vibrant and sustainable property market and assist the economy recovery”.
Click here for an online quote for buying or selling a property, either as first time buyers or previous home owners. Alternatively, give us a call – Peter Voce will be delighted to explain a quote over the telephone – contact him on 01202 499255.
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