Budget 2013: Construction sector boost from Help to Buy move
THE Chancellor delivered a much needed shot in the arm for Britain’s homebuyers and housebuilders with his new Help to Buy scheme.
The Help to Buy scheme improves on a previous scheme known as FirstBuy. It enables buyers to purchase their home without saving up a big deposit, but just putting down a 5% deposit on a home.
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Up to 20% of the cost of the home is funded by a “shared equity” loan, which will be repayable when the home is sold.
The remainder is paid for with a standard mortgage.
Whereas the previous scheme was only open to first-time buyers, this one will be available to all buyers.
It will cover homes up to the value of £600,000.
Many people have struggled to save up enough since banks scrapped their best mortgage lending deals and demanded bigger deposits after the financial crisis.
The Chancellor also announced a new mortgage guarantee, which he said would dramatically increase the availability of loans.
It will run for three years from the start of 2014 and will involve £130bn of mortgages.
Graeme Crawford, tax partner at Ernst & Young, welcomed the Chancellor’s £3.5bn Help to Buy scheme, which he said represented a return to Thatcherite values on home-ownership.
“It appears to be a sensible and well thought through plan , and one that will help get the property market moving and of course give a shot in the arm to the construction sector,” he said.
“It will also have a multiplier effect on the wider economy too.”
