News for Homebuyers

News for Homebuyers

The  Chancellor  announced  at the recent  Budget  two  new schemes designed to support home loans  where  home buyers are struggling to  raise a large deposit.

The Help to Buy scheme  will provide up to 20% of the value of the property (new build houses only) by a shared equity loan .   You have to provide at least a 5% deposit so this means that  you could buy a property with just a 75% mortgage from a bank or building society.
The equity loan can be repaid at any time or when you sell the house but  if the house value increases so does the amount of the loan that you will have to repay.   The loan will be interest free for the first 5 years  but after that there will be an annual fee of 1.75 % payable which increases every year by 1%  above the Retail Prices Index.

This is an extension of the  existing First Buy scheme  and now  applies to all buyers of newly built homes not just first time buyers. You can apply  from 1/4/13 and the scheme runs for three years.

The second scheme is a Mortgage Guarantee scheme which will be available for three years from  January 2014. This will apply to new and old houses  (the  previous Newbuy scheme  only applied to new houses) and not just to first time buyers.   You will have to provide at least 5% deposit and  the government will be guaranteeing up to  15%  of the  house price. This is intended to encourage lenders to offer loans  of up to 95% , secure in the knowledge that the government guarantee minimises  any risk.  The details of this scheme however are still awaited.

The maximum house price for both schemes is £600,000.

Stamp Duty: up until 5 April 2013  if you bought a house in certain areas which the government had designated  “disadvantaged “ (there were three such areas in Ipswich)  you  could pay up to £150,000 before having to be stamp duty. Although it wasn’t mentioned in the Budget, the Disadvantaged Area  Relief was abolished on the 6 April 2013 so stamp duty is now payable on all properties over £125,000.

Please contact us if you  would like more information about buying or selling a home.

Jane Riley | Partner
Head of Property Department, Kerseys

25 April 2013

(Photo by Images_of_money, Flickr)