In his March statement, Chancellor George Osborne announced that he was going to expand a government scheme to help people purchase a new home, whether they are first time buyers or not.
Help to Buy
Around £5.4 billion has been invested in the scheme by the government in order to tackle long-term problems in the housing market, including helping first-time buyers get a foot on the property ladder.
It’s not only aimed at people wanting to get on the first rung of the ladder however, as the government also intends to help people go up the ladder and purchase larger or more suitable properties.
The deposit
The Help to Buy scheme enables people to put down a five per cent deposit on a newly built home (such as new homes by David Wilson Homes , Barratt Homes and other developers). This figure is much less than some banks demand these days. The purpose of this is to increase the supply of low-deposit mortgages as well as new housing.
If you already have a five per cent deposit and want to access a newly-built home, then you are eligible for the Help to Buy scheme, which came into operation in April.
Mortgage guarantee
The Chancellor also announced a new mortgage guarantee, which he said would dramatically increase the availability of loans and help families come one step closer to being able to afford the type of house they dream of living in.
Whether you are after an old or new house but can’t stump up the kind of deposits that are being demanded today, the Guarantee scheme might be able to help you out.
It will run for three years from the start of 2014 and will be used to support £130 billion of mortgages – which is actually a relatively small portion of the entire market but useful all the same.
Make sure
If you are interested in taking advantage of either of these schemes, obviously as with any financial agreement it is imperative you are 100 per cent aware of what you are agreeing to before you sign the dotted line.