George Osborne revealed in his Budget that he hoped to allow homebuyers with smaller deposits to get onto the housing ladder. This will see the First Buy scheme extended to include all buyers wishing to purchase a new build home.
The scheme will also be extended to include all properties valued at less than £600,000. Buyers will raise a deposit of 5% while government will contribute 20% of the sale price. The loan will be interest free for 5 years.
“We’re going to commit £3.5bn of capital spending over the next three years to shared equity loans,” Osborne told the House of Commons.
“From the beginning of next month, we will offer an equity loan worth up to 20% of the value of a new build home – to anyone looking to move up the housing ladder.
“You put down a 5% deposit from your savings, and the government will loan you a further 20%.
“Previous help was only available to those who were first time buyers, and who had family incomes below £60,000.
“Now help is available to all buyers of newly built homes on all incomes.”
The Chancellor later revealed plans for a mortgage guarantee scheme available to all buyers.
Earlier in his speech Osborne spoke of his desire to get more people into their own homes: “The deposits demanded for a mortgage these days have put home ownership beyond the great majority who cannot turn to their parents for a contribution,” he said.
“That’s not just a blow to the most human of aspirations – it’s set back social mobility and it’s been hard for the construction industry.”