Help to Buy second phase up and running
Martyn R Cox & Co have been looking forward to the second phase of the Help to Buy scheme and predict that a large number of hopeful buyers will utilise the taxpayer-backed mortgage indemnity scheme.
Mortgage applications can be made from now under the scheme, but the loans themselves will not be available until the New Year, meaning that house sales can be agreed and go to exchange, but not completion before then. The entire scheme was originally intended to go live on 1st January.
According to the Mortgage Advice Bureau, 65% of young adults plan to buy their first home or move house during the three-year lifetime of the scheme which gives access to 95% mortgages.
The second phase is available on all property rather than just new-build homes. One in five say they are more likely to buy a second-hand home as a result of the scheme, says the MAB. The research for the MAB was done among 1,022 UK adults aged 18 and above.
According to Santander, more people are now planning to buy a property in the next 12 months than was the case at the start of the year. Of those, 33% would be first-time buyers, 32% home-movers, and the balance either buying second homes or buy–to-let properties.
Help to Buy will stimulate the market and the extension of the scheme should see existing home owners who have been unable to move, entering the market again.
Our understanding in simple terms, is that buyers will still need the income to justify a 95% loan, but the larger deposit required by lenders will be underwritten by the Government. We think this is a great opportunity, particularly for first time buyers.