There finally seems to be some substantial help at hand for first time property buyers and that too from the government. Chancellor Gordon Brown is expected to announce public aid to first time buyers through reasonable mortgages, in the government’s attempt to encourage democracy in owning property.
First-time buyers, who were grappling to get on to the property ladder, especially in London and the Southeast, would be provided special assistance from the state to enter the property bracket by the ‘shared equity scheme’ and the availability of cheap mortgages.
This strategy would usher in new and fresh property buyers into the housing market and promoters of this scheme believe that these new buyers could in turn support the slouching housing market and prevent it from falling further.
According to the aforesaid scheme, the Treasury will pay as much as half of the equity of a house along with the bank or building society. This strategy would help cut average monthly repayments to be made on a home by at least £372.
Meanwhile, the Treasury signalled that it could provide about £1billion for the scheme, out of which around £50 million would be earmarked separately for administrative purposes. This strategy of the State has been devised keeping in mind the severe problems faced by buyers in the capital, London and the South-East where new houses are priced exorbitantly, which make it extremely difficult for first time buyers to make a purchase.
Even as a ceiling will be imposed on some areas in the country regarding the eligibility of the value of a home for the state’s plan, government sources notified that customers close to London would be facing either higher restrictions or no limits at all.
Furthermore, only those property buyers that conformed to the most deserving list of the state would be conferred with the financial aid.
This move seems to have surfaced following a few experts and ministers’ worries regarding the property market downturn. Anxiety was mounting amongst some officials who thought that the absence of first-time buyers from the property ladder would hamper the selling trends in the housing sector and afflict several others dependant on property price hikes.
Therefore, this scheme of the government would help first-time buyers to enter the market and make about 50 to 75 percent purchases of a home. First time buyers would be required to pay a minimal amount as “rent” to the state for the portion they did not own and also had the valuable choice of buying the entire property and funding the remaining share in the event of an increment in their incomes in future.
Posted
on : Mon, 23 May 2005 18:20 GMT | Mortgages News
By : Mike Lawson
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