Good news for those looking to buy a new build property, Help to Buy phase one is being extended to the end of the decade. The first phase of Help to Buy allows borrowers with a 5% deposit and 75% mortgage to secure up to a 20% loan from the Government for the remainder. The loan will be interest-free for five years and will be repayable on sale. To qualify, new build homes must be worth less than £600,000. The Government say this extension will allow a further 120,000 homes to be built.
Lending to First Time Buyers reached its highest quarterly total since Q3 2007, according to figures released by the Bank of England. The value of lending to those taking their first steps on the housing ladder grew 41% from the fourth quarter of 2012 to quarter 4 2013 amounting to £10.6bn.
Virgin Money has increased its borrowing limits from 70% to 75% loan to value on a Buy to Let property. This is good news and rates start in the mid 3% range, depending on circumstances and their products have £750 cash back to help towards costs. Lender fees on these products range from £995 right up to 2.5% of the loan amount.
Halifax has revealed that is cheaper to buy than rent. The average monthly costs associated with owning a three bedroom house stood at £645 in December 2013, 16% lower than the typical monthly rent of £769 on the same property type. This is a significant shift since 2009 when the average monthly costs for owning were £646 and renting £652.
Finally, 83% of non homeowners aspire to join the property ladder, but despite the return of 95% mortgages under Help to Buy 2 (mortgage guarantee scheme), 62% of these ‘would be first time buyers’ still cannot afford the necessary deposit. The study, by leading mortgage insurance provider Genworth, also highlighted there is widespread ignorance about Help to Buy 2 with 40% of aspiring homeowners having no knowledge of the scheme or no understanding of how it works!! This does surprise me and I would always say seek independent advice to find out the best options.