UK government helps boost first home buyers

by AB28 Apr 2014
Australia may be having great trouble attracting and helping first home buyers to the market – but in the United Kingdom it’s a completely different story.

The number of first home buyers in Britain last month reached its highest level since 2007 as increased availability of high loan to value mortgages helped new entrants to the market, according to Britain's largest estate agency chain LSL.
 
The figures showed there were 31,400 sales to first-time buyers during March, the highest since the property market peaked six and a half years ago.
 
LSL put the first-time buyer sale success down to the British government's Help to Buy scheme, which has made 95% mortgages more readily available.
 
The two-part scheme enables buyers to get on the housing ladder with as little as a 5% deposit with a loan from the government. More than 17,000 homes have been bought under the scheme since it started a year ago, and last month the government announced it will extend to 2020, to help an estimated 120,000 more households.
 
As a result of the scheme and improved conditions for lenders, the average loan to value has increased from 80.6% in March 2013 to 83.5%, reported UK newspaper The Guardian.
 
This means that despite a 5.7% rise in the average first-time buyer house price since over the year, to £143,906 [$260,715], the average deposit has fallen to a three-year low of £23,802 [$43,122].

The figures come ahead of new rules on mortgage lending, set to come into effect on Saturday. Commentators have suggested that there could be a slowdown in lending as the new rules bed in.

However, British homebuyers and re-mortgagors will face tougher checks under new rules for lenders which began on Saturday.

Borrowing will be based on how much would-be borrowers have left after regular expenditure, rather than on their income, and lenders will have to check that people can still afford repayments if interest rates rise.

MORE:

First home buyers staying away in droves

HIA thinks first home buyers will resurge soon

First home buyers 'lost in the wash'

COMMENTS

  • by Country Broker 28/04/2014 9:56:29 AM

    This Federal Government with its ultra conservative economic approach will not even think about this . They should be , housing led recoveries are what will get this country going. Not one led by foreign nationals , but First home buyers buying land and building Home with FHOG assistance . Will the treasurer and the treasury listen , no , Treasury appears to have this treasurer completely bluffed .