Chancellor George Osborne has today announced new plans to help people to buy their own homes.
The Help to Buy scheme improves on a previous scheme known as FirstBuy.
The main points of the new scheme are:
- It enables buyers to put down a 5% deposit on a newly built 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. That loan will be interest-free for the first five years.
- Thereafter borrowers will have to pay a 1.75% annual fee on the “shared equity” loan, which will then rise by 1% above the Retail Prices Index (RPI).
- 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 of newly built homes. The income limit of the previous scheme @ £60,000 a year will not apply to the new scheme.
- It will cover newly built homes up to the value of £600,000.
- Borrowers will be able to apply from April 1st 2013.
