Help To Buy – Government Home Equity Loans

The chancellor George Osborne made a bold move in his 2013 budget government statement to help home buyers with the “Help to Buy scheme” but how will it work? With the UK economy stalling, debt growing and the difficult economic circumstances we face, will this help? We believe it will. This site will help explain and collate the information and news as this scheme rolls out.

The key benefit over previous schemes like FirstBuy and NewBuy is that this package which is in two parts will be available for purchase of any home old or new and not just for  first time buyers so it is hoped will be a and will help lenders provide more mortgages to more people. Initial estimates from industry analysts say that this move should help an estimated 1/4 million people start or move up the property ladder. The scale of the move is unprecedented in UK history and is hoped should boost home ownership by helping the hundreds of thousands of people who struggle to get a loan to value as well as many first time buyers who simply want a foot on the ladder but due to the deposit required face a huge stumbling block.

Let us take a closer look at some FAQ’s here..>>

The UK trying to build our economy back up on the solid foundations of bricks and mortar.
Due to the state of the economy most people cant get the money for a deposit these days so its is hoped that billions of taxpayer cash that will be pumped in to  help new buyers and people who need a bigger home some relief as the whole housing market has hit a huge stumbling block since the start of the UK recession in 2008. Now the dream of a family home can be a very real one for potentially millions of

English: Home Buyers - Town Street

English: Home Buyers – Town Street (Photo credit: Wikipedia)

people over the coming years even though house prices are still quite shaky this move will surely be a big boost to both the housing sector and the economy as a whole and ultimately will give people a chance to buy their own home and the steps to buying a house made a lot easier.

What is Help To Buy?

In his speech the chancellor said:

Today I can announce Help to Buy.
The deposits demanded for a mortgage these days have put home ownership beyond the great majority who cannot turn to their parents for a contribution.That’s not just a blow to the most human of aspirations – it’s set back social mobility and it’s been hard for the construction industry. This Budget proposes to put that right – and put it right in a dramatic way.

Help to Buy has two components.

First, we’re going to commit £3.5 billion of capital spending over the next three years to shared equity loans.

From the beginning of next month, we will offer an equity loan worth up to 20 per cent of the value of a new build home – to anyone looking to move up the housing ladder.

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You put down a five per cent deposit from your savings, and the government will loan you a further 20 per cent.

The loan is interest free for the first five years.

It is repaid when the home is sold.

Previous help was only available to those who were first time buyers, and who had family incomes below £60,000.

Now help is available to all buyers of newly built homes on all incomes.

Available to anyone looking to get on or move up the housing ladder.

The only constraint will be that the home can’t be worth more than £600,000 – but this covers well over 90 per cent of all homes.

It’s a great deal for homebuyers.

It’s a great support for home builders.

And because it’s a financial transaction, with the taxpayer making an investment and getting a return, it won’t hit our deficit.

The second part of Help to Buy is even bolder – and has not been seen before in this country.

We’re going to help families who want a mortgage for any home they’re buying, old or new, but who cannot begin to afford the kind of deposits being demanded today.

We will offer a new Mortgage Guarantee.

This will be available to lenders to help them provide more mortgages to people who can’t afford a big deposit.These guaranteed mortgages will be available to all homeowners, subject to the usual checks on responsible lending.Using the government’s balance sheet to back these higher loan to value mortgages will dramatically increase their availability.

We’ve worked with some of the biggest mortgage lenders to get this right. And we’re offering guarantees sufficient to support £130 billion of mortgages. It will be available from start of 2014 – and run for three years.

And a future Government would need the agreement of the Bank of England’s Financial Policy Committee if they wanted to extend it.

Help to Buy is a dramatic intervention to get our housing market moving:

For newly built housing, Government will put up a fifth of the cost.

And for anyone who can afford a mortgage but can’t afford a big deposit, our Mortgage Guarantee will help you buy your own home.

That is a good use of this Government’s fiscal credibility.

In the Budget Book, we also set out more plans for housing:

– Plans to build 15,000 more affordable homes

– Plans to increase fivefold the funds available for building for Rent

– And plans to extend the Right to Buy so more tenants can buy their own home.

In a press release the Council of Mortgage Lenders responded to the mortgage help to buy scheme and the availability of these low deposit mortgages by saying:

Because it will take some months to design and put the scheme in place, the benefits will not be immediate. However, a successful scheme could ultimately enable lenders to offer more low-deposit loans than they would otherwise be able to do without incurring concerns from funding markets, prudential regulators, or their own internal risk committees.

In the meantime, the CML urges the government and the building industry to continue to support NewBuy, as well as the increased focus on the reinvigorated equity loan scheme that replaces FirstBuy.

As you can see there are benefits if you are one of many first time buyers buying your first home or people looking to move up into new build homes or even those who want home loans who have bad credit and are struggling for the extra deposit cash. All these people should find some kind of help with this new offer.

Help to Buy let us take a closer look at some common questions..>>

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4 Responses to “Help To Buy – Government Home Equity Loans”

  • sarah:

    hello my family wish to look at the help to buy scheme but we already mortage a house what happens with this house can we part exchange our home on the help to buy scheme

  • Lee:

    Can anyone tel me if you can use the help to buy scheme alongside a part ex?

  • margaret eadsforth:

    I would be obliged if you could let me know, how an estate agent can offer the help to buy scheme to buyers in 2014.
    I look forward to receiving your help, in promoting this scheme, in order to help people onto the property ladder.

  • Could someone mail me with details on how I can apply for money from the govenment towards purchasing a home in Scotland

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