First-Time Buyers offered a step on housing ladder
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On the 19th of April 2021, first-time buyers will receive extra help to get on the housing ladder with the launch of the 5% deposit mortgage scheme. However, most lenders currently require buyers to pay at least a deposit of at least 10%, which can be an insurmountable hurdle in an area with high property prices.
5% Deposit scheme for First-Time Buyers
Under the government-backed initiative they will only have to find half that amount while the treasury will provide extra guarantees to lenders which sign up to the initiative.
As the national average asking price of properties that first-time buyer’s usually look for is over £200,000, that would mean saving a typical deposit of around £10,000. The move comes after low-deposit mortgage offers virtually disappeared during the coronavirus pandemic, as lenders became more cautious about offering “riskier” loans in a very tough economy.
However, the scheme which was announced by Rishi Sunak last month, applies only to properties sold for up to £600,000, and is available from today with such lenders as, Lloyds, Santander, Barclays, HSBC, NatWest, and Halifax.
How much can I borrow?
Aimed mainly at First-Time Buyers
The new scheme is mainly aimed at First-Time Buyers, who are looking to step foot onto the property ladder – although not restricted to just that group. All recipients will also be able to fix their mortgage rates for five years, as more mortgage applications will open until December 2022.
After the 2008 financial crash that saw the nation enter a wide recession, low-deposit mortgages became even more rare and climbing property values steadily priced many new buyers out of the housing market. This trend prompted the David Cameron government to launch the Help to Buy Scheme, which is still in operation – however, only to current customers. This saw a rise in young people renting a property to buying into the property market, but since the on-going pandemic low-deposit mortgages again saw a decline…
Generation Rent to Generation Buy
For too many people, no matter how hard they work, home ownership can seem out of reach. One of the biggest divides in our country has been between those who can afford their own home and those who cannotThat is why we are determined to do everything we can to help hard-working families and prospective first-time buyers get their feet on the housing ladder in an easy and affordable way, to level up this country.
Stephen Kerrigan of MortgagesRM – Doncaster Fee Free Mortgage Advisor had mentioned that he wanted the government to help turn generation rent into generation buy:
Younger customers, especially first-time buyers when saving up for a big deposit can often be difficult, and we know as people in these groups are some of the hardest hits by the effects of the pandemic.
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