First-time Buyer scheme published by Government

The Government has today published details of mortgage indemnity scheme to help 100,000 first-time buyers get on the property ladder.

The initiative will allow first-time buyers to purchase new-build property with a 5% deposit, with the government and house builders providing security for the loan. This means that if the property is sold for less than the outstanding mortgage total, the lender will be able to recover the loss.

Through the initiative, which will launch in Spring 2012, lenders will be encouraged to offer more high loan to value mortgage products.

Other policies also announced by the coalition government as part of their housing strategy include a £400million Get Britain Moving scheme aimed to help projects put on hold due to lack of funding, and a review of the Right to Buy scheme giving social tenants the opportunity to buy their home for up to half of its value. Receipts from the additional Right to Buy sales will, for the first time, be used to support the funding of new affordable homes for rent on a 'one for one' basis, which is expected to deliver up to 100,000 new homes and support 200,000 jobs.

James Kersh, director at Sutton Kersh comments, “Positive step forward to break the viscous circle that has damaged the property market over the last 4years. Any initiative that helps stimulate activity in the first-time buyer market is positive, however it is only focused on new builds.”

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