FirstBuy will give FTB sector a boost

11 July 2011

Time has a knack of flying by but it can also make recent events and holidays feel like they were in the distant past. The Budget, for instance, seems like ages ago but is actually just over three months old.

One proposal announced back in March was the FirstBuy scheme, which has now been formally launched and will include over 100 house builders.

It is intended to help first-time buyers get on the housing ladder by providing a 20% equity loan from the government and a builder, which, together with a 5% deposit from the borrower, will allow them to take out a 75% LTV mortgage.

Loans will be repaid on resale of the property, with the government’s share available for reinvestment in more affordable housing. The first homes are expected to come on-stream in September.

As one of the lenders backing this scheme we feel it is important to implement it in the right way. Applicants must meet our affordability criteria in assessing their ability to repay the loan over the term of the mortgage and meet all other aspects of our shared equity lending policy.

They are also independently assessed for affordability as a pre-screening by advisers appointed by the FirstBuy agents.

We will offer specific products for borrowers who opt for FirstBuy. Of course this won’t be the solution to all first-time buyer issues but it is a step in the right direction and will give this sector a boost.

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