Help to Buy schemes set to boost housing market

The Chancellor has announced a £5.4 billion package of financial support to boost the housing market in this year's Budget. There will be two schemes; the first is a Help to Buy equity loan scheme that applies to new build properties. Providing borrowers can raise at least a 5% deposit, the government will lend up to 20% of the value of the property as an equity loan. The maximum property purchase price will be £600,000 and the loan will be interest free for the first five years. The second scheme is a Help to Buy mortgage guarantee scheme that will be available for both new build properties and existing homes. Providing borrowers can put down a 5% deposit, the government will guarantee the mortgage. The hope is that this guarantee will encourage lenders to offer better low-deposit mortgages and support £130 billion worth of new mortgage lending. Borrowers will be able to apply from 2014 and it will run for three years. There has been a mixed response to George Osborne's plan to help some 130,000 people secure a mortgage. The Times reports that the Treasury plans to charge a “commercial fee” to participating lenders and the exact fee has not been agreed. For more information click on this link: https://www.gov.uk/affordable-home-ownership-schemes/help-to-buy-mortgage-guarantees March 22, 2013