More support for
Help to Buy Announced
The Autumn Statement brought a number of important
announcements for homebuyers, not least a doubling of the housing budget to
boost the supply of new homes. Much of
the focus is on affordable housing and builds on the 200,000 discounted Starter
Homes that have already been pledged.
In addition to the Starter Home Initiative the Chancellor
announced Help to Buy: Shared Ownership.
This is expected to number 135,000 homes which will be available to
those that want to purchase an initial share of the property, with the option
to increase to full ownership as their circumstances change.
Shared Ownership is not a new concept and many housing
associations offer it as an affordable way for aspiring buyers to take a first
step onto the property ladder. Different
housing associations can apply varying eligibility criteria depending on the
target buyer. The new Help to Buy Shared
Ownership properties will not carry any such restrictions, other than
qualifying households will earn less than £80,000 outside London and £90,000 in
London.
The Help to Buy equity loan scheme has been highly
successful in offering an alternative for homebuyers struggling with deposit
and affordability requirements. The
scheme has been extended until 2021 and a new variant is to be launched in
early 2016.
London Help to Buy will offer a 40% equity loan, double that
of the standard 20%, recognising that house prices in London are substantially
higher than elsewhere. Although more
detail is due in the New Year it sounds like it will follow the approach of the
existing scheme.
Available on new build property the equity loan is interest
free for the first 5 years and available for those with just a 5% deposit. Assuming it works in the same way, the repayable
amount will be the equivalent percentage of the sale price.
All in all, the Autumn Statement included a number of
measures to boost the supply of new properties and hopefully increase the
availability of affordable homes.
Guild Mortgage Service, Provided by London
& Country Mortgages
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