Estate agents back Government Help To Buy scheme
Published: 11 Oct 2013 09:00
The new scheme is open to all home movers, whether they are first timers, moving up the property ladder, buying a new build or buying a resale property.
The buyer puts up a 5% deposit, the Government and bank then jointly guarantees up to the next 15% of the property’s value, in return for a fee paid for by the lender. This takes the risk away from the banks, making them more inclined to lend money.
Jon Langley, a senior negotiator at Bracknell-based Sears Estate Agents, said a deluge of activity in the local property market is expected over the coming weeks.
He said: “There have been a lot of people hoping to buy. It will keep things coming along – I think it’s a good thing.
The new scheme started on Monday but money for mortgages arranged will only come through in January – meaning all completions will be from the New Year.
The purchase price must be under £600,000 and the Government’s initiative is designed to enable buyers who can afford only small deposits to buy a home.
The property must be the only home the buyer owns and the property being purchased should be their primary residence and not let out.
Mortgage 'stress tests’ will be used to ensure the purchasers can afford the mortgage repayments, and anyone with historical difficulties relating to debt repayment may be refused participation.
RBS, NatWest and Halifax start taking applications this week, with HSBC and Virgin Money also planning to get involved.
Stephen Noakes, mortgage director at Halifax, said: “This scheme will help first time buyers and homemovers who can afford a mortgage but until now, have struggled to raise the necessary deposit.
“Through the scheme, these products will make mortgages more accessible – providing a genuine solution for those who have not been able to get on, or move up, the ladder. We know there will be strong demand for these rates, and expect to take applications for these products from Friday.”
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