YBS commits £100m to OMHB

Yorkshire says it has committed over £100m to the Open Market Homebuy scheme since its launch last October.

The society, one of four lenders participating in the scheme, says the scheme could be helping first-time buyers onto the property ladder faster than others who have to rely on a conventional mortgage.

It has found that 54% of borrowers on the scheme are under the age of 30 years.

Teachers, medical staff and police officers are the most likely to apply for a mortgage through the Scheme, with 40% choosing to buy a property on their own rather than with a partner.

The average purchase price of properties bought through the scheme is around £160,000 with mortgage payments based on a loan of just £120,000.

Industry figures show 87% of all first-time buyers are choosing a fixed rate mortgage – Yorkshire is the only lender with a high street presence to offer a fixed rate mortgage through the OMHB scheme.

It says a fixed rate ensures borrowers, who may have stretched themselves to afford their mortgage, have certainty that their monthly payments will not increase for at least five years.

Yorkshire Building Society is also the only lender participating in the scheme that allows applicants to use their branches where fully qualified mortgage advisers are available for face to face advice.

The scheme is available throughout England and Wales, but Yorkshire has found it is most popular in London and the South East (71%), as rising house prices have made it particularly difficult to buy a property in these areas.

Almost half of those taking out an OMHB mortgage bought a terraced house (45%) with less than a third choosing a flat (29%).

A spokesman for Yorkshire says: “The OMHB scheme is very close to our building society origins of helping people into homeownership.

“We are therefore delighted to be one of the main providers of this government initiative which is helping key workers get on the property ladder in areas where house prices have spiralled out their reach.

“Despite a slow start to the scheme, which is due to the process of confirming customer eligibility, OMHB has now taken off at a more rapid rate than we had anticipated.

“It is a great success for the society with properties to the value of £115m being bought through the scheme.”