Help to Buy Scheme - What it Means For Homebuyers

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26 Mar 2013

How the Budget will help buyers

Author: Vincent Courtney

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Good news for homebuyers as The Chancellor announces a new 'Help to Buy' scheme in the budget. Consisting of two key components; a shared equity scheme and a mortgage guarantee, this scheme will help not only first time buyers but all homebuyers looking to buy both new and second-hand properties.

The initial part of the HomeBuy scheme is FirstBuy; a shared equity scheme for new-build properties set to continue for three years from the 1st of April. FirstBuy is available to any buyer of a new property with a maximum purchase price of £600,000. These homebuyers will only need a 5% deposit and then the Government will lend them 20% with the remaining 75% coming from mortgage lenders.

Although this scheme applies exclusively to new-builds, the second half of the 'Help to Buy' scheme, launching next January, will be open to all buyers of both new-build and existing homes for three years. Replacing and extending the existing NewBuy initiative, currently co-funded jointly by the Government and developers, under Help to Buy a mortgage guarantee scheme will be provided funded solely by the government.

News of the extension of the mortgage indemnity scheme beyond new build housing was greeted with enthusiasm by Vincent Courtney, Managing Director of Residential Sales for the Romans Group.

Vincent commented that; "This scheme is really positive news for estate agents and homebuyers alike. It is reassuring to see that the Chancellor is putting in place the financial support required and that this is not just limited to first time buyers buying new builds.

"We have seen some buds of growth in the last few months and hopefully this scheme will help the market blossom in the months and years ahead."

The Treasury has produced some useful illustrations which explain how the scheme works in more detail, click here to learn more.

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