Help to buy to end
The Government has announced the end of George Osborne’s home ownership NewBuy Guarantee Scheme to help FTBs after first being introduced.
The aim of the scheme was to offer first time buyers the chance to buy their home upto £600,000 with a government back loan upto 95% LTV. The mortgage had to be 4.5 times or below the borrower’s income.
The U-turn comes as the new Chancellor, Philip Hammond decided there are apparently more than 30 commercial lenders offering loans 90 – 95% LTV outside the scheme. Therefore, rendering the introduction of the scheme a success in its own right.
The other portion of the Help to Buy being the equity loan scheme and ISA bank account will continue to be in effect. The Government will lend up to 20% of the cost of the home, and the loan is interest free for the first five years. The ISA bank account offers people as much as 25% on top of their account savings as an incentive. Although this element can only be used on new build houses.
The chancellor believes the market has become less reliant on this type of scheme with other lenders now supporting FTBs in a similar fashion.
Some believe we are in a housing crisis which is a result of short supply vs rising demand. It’s by some that perceived help to buy increased house prices with the cheap credit available but did not address the house shortage issues. In order to address this issue maybe a less restrictive set of planning laws would actually help to alleviate this underlying issue…
What next for first time buyers?