London Help to Buy scheme launched
If you live in London and want to buy a home, the Government has announced that it will lend you 40% of the price of your home from 2016. This is to be an extension of the existing Help to Buy Equity Loan scheme, and will be called London Help to Buy.
Currently Help to Buy Equity Loans are open to both first-time buyers and home movers on new build homes in England with a purchase price up to £600,000.
They work like this – if you’re able to pay at least 5% the value of your home as a 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%.
Now the Government will increase the loan it will give buyers of newly built homes within Greater London from 20% to 40%. The increase reflects the current property market in London and will be introduced in early 2016.
Andy Frankish, new homes director at Mortgage Advice Bureau, said: “London is renowned for its high house prices, so a dedicated Help to Buy scheme for the capital is a golden opportunity for those who have been frozen out of buying in the region altogether. London is a unique market, and the increased 40% equity loan reflects the higher cost of buying in the region.”
And Patrick Bamford, director at Genworth, added: “It’s welcome to hear the Chancellor recognise that more needs to be done to support homeownership, but new Help to Buy initiatives still leave questions hanging over the future of the mortgage guarantee, which has been one of its success stories so far.
“The Government clearly has no shortage of ideas to support first-time buyers, and the London Help to Buy scheme will help to tackle some of the challenges faced by hopeful owners in the capital. To have the biggest impact on overall homeownership, these additions must run alongside the continued use of a mortgage guarantee or private mortgage insurance to boost access to high loan-to-value mortgages across the entire market beyond 2016.”