First time buyers could get help with deposits
March 25, 2011
As part of the 2011 Budget the Chancellor of the Exchequer, George Osborne, announced a range of new measures that were designed to help different groups, and this included measures that the government has decided to put into place to help first time buyers to get their foot onto the first rung of the property ladder.
Osborne announced the launch of a new equity loan scheme called Firstbuy, and it is thought that around ten thousand first time buyers or more could benefit from the scheme in order to help get them onto the property ladder. Over recent years first time buyers have stood little chance of being able to own their own home because of the lack of 100 percent mortgage and the demand for higher deposits from lenders.
Under the Firstbuy scheme the buyer will only have to save 5 percent of the property value themselves by way of a deposit. The government will then put up 10 percent and house builders will put up the other 10 percent as part of an equity loan, which is deferred with regards to repayment for five years and then charged at very low rates of interest. For first time buyers this could mean the ability to get onto the property ladder far quicker than they would otherwise have been able to.
However, one official was concerned that there could be repercussions, stating: “This seems to encourage first-time buyers to purchase property with very high loan-to-value ratios. This is a bold strategy given that the credit crunch was largely caused by people borrowing more than they can afford to repay. We must hope that there are sufficient safeguards in place to protect against repeating the mistakes of the past.”
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- Much larger deposit required from first time buyers Whilst industry experts are stating that first time buyers can at last look forward to increased affordability due to falling house prices and interest rates, both of which are expected to continue falling over the
- First time buyers paying more for mortgages due to deposit levels A recent report has shown that those taking out mortgages with just a small deposit to put down are paying far more each year for a mortgage than those that have a higher deposit level
- Affordable first time buyer mortgages launched by post office Over recent years first time buyers have experienced many difficulties when it comes to getting onto the property ladder, and with everything from high property prices to mortgage restrictions and high deposit levels to hinder
- First time buyers spending fortune on deposit and mortgage Data from a recent report has suggested that first time buyers are now spending a fortune on their mortgage deposit and their first year of mortgage repayments. The report claims that first time buyers are
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