George Osborne announces FTB help in his second Budget
George Osborne has announced an assisted deposit scheme aimed to help First Time Buyers (FTB) in an effort to help new buyers onto the housing ladder.
Mr Osborne has set aside £250,000,000 for an ‘assisted’ deposit scheme for new homes and First Time Buyers.
This scheme will be available to people with an income of less than £60,000, but who will need to have the funds to put down a 5% deposit. According to the Land Registry, the average price per terraced house is currently £188,048. This would require the First Time Buyer to have a deposit of £9,402.
The FTBs who are eligible will be able to apply for a loan of up to 20% of the value of the property, which will be jointly funded by housebuilders and by the government. The loan will be interest-free for 5 years and must be repaid when the property is sold.
Most mortgage lenders are currently requesting a 10% deposit before lending to First Time Buyers. This assisted deposit scheme is aimed at helping the construction industry as well as FTBs. Apparently, the government hope that an additional 10,000 new homes will be built and thereby protecting jobs within the construction industry.
Of course, Mr Osborne could have asked the banks owned by the tax payer, to offer First Time Buyers mortgages with a 5% deposit and reduce their lending margins…..