The scheme was announced in this year’s Budget and aims to help first-time buyers get on the housing ladder by providing a 20% equity loan from the government and a housebuilder, 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 this year.
Lenders which are backing the scheme and are prepared to offer the 75% LTV mortgages include Halifax, Nationwide, Barclays and the Melton Mowbray Building Society.
And subject to contracts signed over the summer, housebuilders offering new-build homes through FirstBuy include Persimmon Homes, Barratt Homes, Bovis Homes, CM Yuill, Galliford Try, Morris Homes, Radian and The Miller Group.
Shapps says: “With 80% of young first-time buyers depending on parental help, I am determined that we pull out all the stops to help those who want to take their first steps onto the property ladder.
“FirstBuy will do just that – a government-backed scheme making £500million available to offer a valuable alternative to the Bank of Mum and Dad. Over the next two years, this will help as many as 10,000 people in England to get that much-needed deposit together and realise their dreams of owning their own home.
“And because this help will be available on newly-built properties, it will also offer a much-needed boost to our housebuilding industry, supporting thousands of jobs across the country.”
Stewart Baseley, executive chairman of the Housebuilders Federation, adds: “Firstbuy will help first-time buyers, boost economic growth and provide a vital shot in the arm for the house-building industry.
“Our members have reacted decisively to support Firstbuy and recognise the scheme is an important first step.”