View more on these topics

Shapps launches FirstBuy scheme

Housing minister Grant Shapps has launched the government’s FirstBuy scheme and confirmed that over 100 housebuilders will be taking part.

GRANT-SHAPPS.jpg

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.”

Recommended

High arrangement fees are hardly fair treatment for clients

I’m interested in the continued talk about treating customers fairly, especially in relation to rates. Despite the Bank of England base rate being 0.5%, to secure an advantageous interest rate on a buy-to-let mortgage of 3.99% – which is hardly giving it away – our clients have to pay an arrangement fee of 3%. So, […]

Newsletter

News and expert analysis straight to your inbox

Sign up
Comments
  • Post a comment
  • PLL 12th August 2011 at 1:32 pm

    Has Schapps not figured out the reason why the banks are very wary of new builds. How this will reinvigorate the market is beyond me. Just another excuse for our greedy and inefficient house builders to rip off a new generation of youngsters

  • Grey Haired Underwriter 24th June 2011 at 11:36 am

    I keep reading about the over-inflated market and the house price bubble but the fact of the matter is that the NR debacle was nearly four years ago and the market hasn’t crashed. There is an undersupply of housing especially in England and the rules of supply and demand apply.

    I would re-iterate what I have said before – a property is worth what someone is prepared to pay for it.

  • Luke Atkinson 21st June 2011 at 12:13 pm

    Agree with all points raised – this seems like further inflation of a severely over inflated bubble.

  • Nick 21st June 2011 at 12:11 pm

    When I voted Tory I thought I’d get some logical government. Instead we’re getting the same sort of Labour meddling, wasting more taxpayers money.
    This scheme is to help the house price bubble remain at unaffordable levels, instead of letting the free market drive prices down.
    Disgraceful.

  • Mary 21st June 2011 at 6:22 am

    This is not really for the benefit of first time buyers. Its just another tool to enable them take out a lot of debt. The overbloated housing market has been propped up and sacrifices have been made everywhere for it. Just let it find its natural level, without throwing anything else at it. Sometimes it looks like the whole economy is being run solely to keep a housing ponzi scheme going.

  • Richard 20th June 2011 at 4:35 pm

    All this talk of austerity measures and cuts to public services, and then suddenly £500 million pounds appears to prop up the housing market!

    Well, we’ve got to look after homeowners, haven’t we?

  • Nick B 20th June 2011 at 3:21 pm

    Stay well away from shared equity schemes or you will be severly burnt. They are a trap for wide-eyed gullible idiots.

  • cornishtinmine 20th June 2011 at 2:29 pm

    Agree with above comments – @Tony because they are worried that prices will fall and more banks will get into trouble…

    You just have to ask yourself “why are banks not willing to lend the full 95%?”!

    …also the 5% equity will be wiped out when you receive the keys, as we all know that you pay a premium for new-build – and they are often of inferior quality to existing stock…

  • Tony Marshall 20th June 2011 at 2:03 pm

    I agree with Simon (@1:53pm). Why are tax-payers funding housebuilders in this way?

    You would expect a Tory government to listen to the market – if the market doesn’t think that young people should buy houses at their current prices, then maybe they shouldn’t.

  • Simon 20th June 2011 at 1:53 pm

    So now the government is wasting valuable tax payers money to keep house prices artificially inflated to give builders bigger profits. How about we just let market forces have a chance so that house prices can fall to affordable levels instead.

    These shared equity scam properties are dangerous for first time buyers. They are 5 or 10 year time bombs who are going to leave the buyer in dire straits when they suddenly have to pay interest on the loan and the mortgage when their overvalued property has gone into negative equity.

    This is a bad scheme for first time buyers, stay well away.