Good news for home buyers as the Government brings in phase two of the Help to Buy scheme three months earlier than planned. The first phase of the scheme was introduced in April and 7,000 people have already benefitted from this although it only applied to new-build properties worth up to £600,000. The second phase will apply to new–build or second hand properties up to the same value and buyers will soon be able to apply for mortgages of up to 95% on all types of property.
The previous scheme was only available to first time buyers of new-build homes but this second phase will benefit people who already own a property and want to move, but do not have sufficient equity to provide a deposit on another property. Buyers who have not been able to find a large enough cash deposit should now find they can get a mortgage, provided they can find a deposit of between 5%-20% of the property’s value.
Several high street banks have already signed up for the scheme and more are expected to join. Although the scheme does not officially start until January 2014, the Government have said that it will allow lenders to start writing loans now and they will become part of the scheme in January next year. Conveyancing Associate Helen Jones says “It will not be possible to obtain these mortgages from all lenders so borrowers’ choices may be limited.” The lenders who have signed up for the scheme will jointly guarantee the loan with the government up to the next 15% of the property’s value.
There are some restrictions on the scheme:
- Only repayment mortgages will be offered
- Loans only available on properties worth up to £600,000
- Checks to ensure buyers can afford repayments
- Not available to people with bad credit history
If you need any further information on this scheme, please call 01202 499255 and Helen or a member of her team will be happy to discuss any questions that you may have.
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