There was expectation that this latest budget would bring a boost to the housing market, and there were indeed a couple of measures introduced that we thought worthy of note.
Firstly an extension of what was formerly called the First Buy scheme has been announced. Recently, the best mortgage rates have been available to those with at least a 20% deposit.
This new ‘Help to Buy’ initiative, which starts in April this year, allows all buyers to put down a 5% deposit on a new home up to the value of £600,000, and they can then apply for up to 20% government equity loan which is interest free for 5 years. After this the buyer will have to pay a 1.75% annual fee, and the loan is repayable when the house is sold.. The government plans to invest £3.5bn in these loans.
The government also announced a mortgage guarantee scheme, which is introduced to help increase the availability of loans. This scheme will support £130 billion worth of mortgages for a 3 year period on homes up to £600,000 whether new or old. The government will guarantee 15% of the value of the mortgage. It starts in January 2014 and is aimed at those who are unable to afford a large enough deposit. This will not only help first time buyers but those trying to move up to a bigger house too. However buy to let is not included in this scheme.
To read more about the budget and how it affects you take a look at the following pages.