The Chancellor, George Osborne, announced in his autumn statement that the government plans to install a new system to provide funding which will help first-time buyers of new-build homes get onto the property ladder.
Under the mortgage indemnity scheme, the government said that it can use the low interest rates it had secured in order to help young families who wanted to buy, but were far from being able to afford the high level of deposit that banks require. It said that young couples will be able to secure a mortgage worth 95 per cent of the value of their homes.
The scheme will be run specifically for first-time buyers on new-build homes, with the government estimating that it will be able to work with those looking to make their first step onto the property ladder in order to provide 100,000 new homes across the UK, making a dent in the shortage of homes available.
While disappointed that the scheme, which comes into effect in the spring, will only apply to new-build homes, Adam Offer, managing director of leading West estate agents, Besley Hill, said the initiative was good news to those seeking to secure a deposit for their first mortgage for this type of property.
“It is essential that more first-time buyers are able get on the property ladder in order to stimulate the housing market and anything that improves the prospects for this sector of the market has to be welcomed,” said Mr Offer.
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