£400 million deal agreed to help first-time house buyers
15 December 2008. A deal worth more than £400 million to help first time buyers aspiring to buy their own home was approved today by Housing Minister Margaret Beckett.
HomeBuy Direct scheme could become profitable for temporary workers and immigrants who rent houses across the UK.
Immigrants fueled the buy-to-let market and rent 20% of Association of Residential Letting Agents (ARLA) members’ properties. Immigration has played a big role in the demand for housing over the past decade.
The HomeBuy Direct will support the house building industry by identifying buyers for their new homes, helping them to weather the current difficult conditions in the market.
More than 130 developers have agreed to offer the HomeBuy Direct scheme which will help up to 18,000 first time buyers to purchase a home at sites across England aided by an equity loan, part funded by the Government and the developer.
The equity loan, which will be free of charge for five years, can be used as a deposit and can cover up to 30 per cent of the purchase price.
This means a first-time buyer could purchase a house worth £180,000 for as little as £126,000. As with other HomeBuy schemes, any first-time buyers whose household income is under £60,000 who cannot otherwise afford to buy will be able to apply.
Eligible first time buyers will be able to apply for the scheme from early 2009 by contacting a HomeBuy agent in their region.
Sir Bob Kerslake Chief Executive of the Homes and Communities Agency said:
"There has been a tremendous response from developers to this scheme and we believe there is demand from purchasers who want to get on the property ladder. Our flexibility means that we have been able to add in additional funding from the National Affordable Housing Progamme to meet demand and respond quickly to the market."
The Government initially announced in September that £300 million would be available for the HomeBuy Direct scheme. The Government has announced today that it will make an additional £100m available for the scheme in order to help up to 18,000 first time buyers, 8,000 more than first planned.