Help to Buy: mortgage guarantee now available for homebuyers
The ‘Help to Buy: mortgage guarantee’ scheme has been introduced three months early to boost the housing market and enable more people to own their own home.
The scheme applies to both new build and older properties and is available to both existing homeowners and first-time buyers. It was due to be introduced in January but the Government brought the date forward so that it came into effect in October.
Help to Buy: mortgage guarantee is targeted mainly at people who can afford to pay a mortgage but are struggling to provide the large deposits required by some lenders. The scheme can be used for properties up to the value of £600,000.
Potential buyers will 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 provide 95% mortgages, secure in the knowledge that the government guarantee minimises any risk.
Help to Buy: mortgage guarantee is in addition to existing government schemes which have so far enabled more than 25,000 new homeowners to take their first steps on the housing ladder.
The figures include 3,749 people who were helped to buy newly-built homes through the industry-led NewBuy scheme, which was launched in March 2012.
NewBuy has been complemented by the Help to Buy: Equity Loan scheme, which in its first 4 months saw over 3,000 sales and 10,000 reservations.
A total of 10,633 people were helped into home ownership through the former FirstBuy scheme, and more than 8,000 council tenants were helped through the reinvigorated Right to Buy scheme.