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15,000 new homes bought under Help to Buy scheme

Posted: 10th December 2013   In: Residential Conveyancing

More than 15,000 people have signed up to buy a home under the government’s Help to Buy: equity loan scheme.

Housing Minister Kris Hopkins said the figures showed there was a renewed confidence in the housing market.

The scheme came into effect on 1 April 2013 and applies to new build properties only.

To qualify, you need a minimum deposit of 5%. The government will then lend you up to 20% of the value of the property through an equity loan. This is interest free for five years and can be repaid at any time within 25 years or on the sale of the home.

It means you could buy a property with just a 75% mortgage from a bank or building society.

The scheme is run in partnership with building companies across the country. So far, more than 900 developers have signed up to take part. More than 80% are smaller firms, building 40 homes or less.

This has helped to create jobs and provided a boost to businesses near the major development sites.

Mr Hopkins urged more builders to get on board to offer the scheme on their new homes.

He said: “The Help to Buy: equity loan scheme is not just helping thousands of buyers on to the property ladder, but is making an important contribution to people’s lives by creating jobs, boosting local business and stimulating the economy.”

The housing market is expected to get a further boost with the introduction of the £12billion Help to Buy: mortgage guarantee, which came into effect in October.

Potential buyers have to provide a minimum deposit of 5%. The government will then provide a guarantee for up to 15% of the purchase price. This is designed to encourage lenders to offer 95% mortgages, secure in the knowledge that the government guarantee minimises any risk.

Please contact Eugene Pritchard or Dipak Odedra if you would like more information about the legal aspects of buying or selling a home.