Posted: 18 November 2013 by Higgins Homes
Potential homeowners all around the country have been waiting for the start of the Help to Buy mortgage scheme, which has finally become a reality. The early figures for the scheme indicate that it has already helped some 2,000 people around the country make offers on homes that they wouldn't otherwise have been able to afford.
The Help to Buy mortgage scheme came into operation in October and is already proving to be enormously popular, with Prime Minister David Cameron indicating that three quarters of those who had applied were first time buyers, many of whom were in their 30s exactly the demographic that the scheme was designed to help. It follows on from the Help to Buy equity loan scheme, which was launched back in April of this year. One of the key differences between the two schemes is that the equity loan scheme was only applicable to new build properties constructed by residential property developers, whereas the mortgage scheme applies to any type of home.
The essence of the Help to Buy mortgage scheme is that a potential buyer can put down an offer on a property worth up to £600,000 whilst having just a 5% deposit thanks to the fact that the government will guarantee 15% of the mortgage. Currently, around 65% of mortgage providers in the UK have signed up to be part of the scheme and, according to the government, a wide range of new mortgage products are soon to hit the market, which should make this scheme even more attractive.
Two major UK lenders have reported on the marked increase in mortgage applications as a result of the Help to Buy mortgage scheme RBS and Halifax, which received some 2,384 mortgage applications. These could potentially be worth somewhere around £365 million in new mortgages, something that simply would not have been possible without the government backing. Whilst there are some fears that these schemes could create a housing bubble, for those who wouldn't have been able to get on the property ladder without them they offer considerable relief and encouragement.
If you would like more information on qualifying for the Help to Buy mortgage scheme, please read more at the Help to Buy section of our website.