Housebuilders and homebuyers benefit from Help to Buy scheme in Budget
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.
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.
Coverage of the Budget is brought to readers of TheBusinessDesk.com in partnership with Ernst & Young.
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.
Tim West, 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.
“It will also have a multiplier effect on the wider economy too.”
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.
