Property news

The two initiatives announced under the Help to Buy scheme outlined in the budget could make a real difference to the overall market, believes estate agency Brian Holt.

clive james
clive james

Staff say the mortgage guarantee and equity loan schemes will give buyers much needed confidence.

Brian Holt director Clive James said that in a budget in which there was little room to manoeuvre, George Osborne looked to the housing market to drive growth in the wider economy.

The mortgage guarantee scheme will see the government underwrite up to 15 per cent of the value of mortgages, enabling lenders to give better deals to home buyers well able to pay the monthly repayments but struggling with finding deposits of up to 20 per cent.

Clive said: “Finding a deposit is a major problem for many would be house buyers and not just first time buyers – the fact is that, as George Osborne has often remarked, not every can go to the bank of mum and dad – but it doesn’t mean they aren’t good people to lend to.”

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As this does not come into effect until the start of 2014, a more immediate impact will be hoped for from the equity loan scheme for new build properties that comes into effect on April 1.

An extension of the existing First Buy scheme for first time buyers purchasing new builds, the equity loan scheme is now open to existing home-owners too. Borrowers will need to raise a minimum 5 per cent deposit themselves but can apply for an interest free loan of up to 20 per cent of the value of the property.

Clive added: “By setting aside £3.5 billion for equity loans, the Government is making a significant intervention that could really help to kick start the new build market. It should not only boost the building trade but also feed through into the overall housing market. Both initiatives are very welcome indeed.”