Three ways the Government plans to help homebuyers in 2016
Since the Conservative Party won the General Election in 2015 and formed a Government it has been vocal about its commitment to homeownership.
A raft of policy initiatives have been announced that are designed to boost the supply of housing in the UK and make it easier for aspiring homebuyers to get onto the property ladder.
Below are three ways the Government said it will help homebuyers in 2016:
1. If you’re saving for a deposit for your first home, you can earn a bonus with the Help to Buy: ISA
If you’re saving to buy your first home, you can put away up to £200 a month in the Help to Buy: ISA and the government will top it up by 25%, up to a maximum of £3,000.
This year, if you put away £3400 in your Help to Buy: ISA, your bonus will be £850 in December (save £1,200 in January and £200 every month after that).
You can take a Help to Buy: ISA out with one of 14 providers.
2. If you’re looking to buy a new build home you could benefit from the Help to Buy scheme
With the Help to Buy: Equity Loan scheme, if you’re able to put down at least a 5% deposit, the government will lend you up to 20% of the rest of the value of the property, alongside your mortgage of up to 75%. And to reflect the current property market in London, those buying in Greater London will soon be able to benefit from up to a 40% loan.
Alternatively, from April 2016, if you have a household income of less than £80,000 outside London, and £90,000 inside London, Help to Buy Shared Ownership will allow you to buy a share of between 25% and 75% of a home. The rent on the rest of the property won’t be more than 3% of the amount left and the scheme will apply across England.
3. Taking out a mortgage is becoming simpler
Which? and the Council of Mortgage Lenders have standardised and simplified mortgage fees, so that the fees you’re charged when you take out a mortgage are clearer.
Lenders have committed to use the same names for fees, so that you only have to get your head round the different types of fees, rather than the different names.
All fees will also have the same fee descriptions, listed in the same order. So when it comes to deciding which mortgage is right for you, it’ll be easier to compare.