More than 130 developers have agreed to offer the HomeBuy Direct scheme which helps first-time buyers, aided by an equity loan, part funded by the Government and the developer. The equity loan, which will be free of charge for five years, can be used as a deposit and can cover up to 30 per cent of the purchase price.
This means a first-time buyer could purchase a house worth £180,000 for £126,000. As with other HomeBuy schemes, any first-time buyers whose household income is under £60,000 who cannot otherwise afford to buy will be able to apply.
The Department of Communities and Local Government are also recommending the prospective buyers to visit an IFA to organise their mortgage.
Housing Minister Margaret Beckett says: “We are determined to give families real help in the current economic climate. For many young families who aspire to own a home, the difficulties in the housing market have made the step on to the property ladder that bit harder. This deal will give them more support and put their dream of becoming homeowners within reach.”
Homes and Communities Agency chief executive Sir Bob Kerslake says: “There has been a tremendous response from developers to this scheme and we believe there is demand from purchasers who want to get on the property ladder. Our flexibility means that we have been able to add in additional funding from the National Affordable Housing Progamme to meet demand and respond quickly to the market.”