The second phase of Help to Buy is to be launched next week after David Cameron unexpectedly announced bringing it forward by three months with lenders, expected to be inundated with applications!
From the 7th October buyers can apply for a 95% mortgage to purchase both new and second hand stock of a value up to £600,000 with taxpayers underwriting up to 15% of the risk for lenders.
Currently lenders have to hold certain amounts of capital and the higher the loans-to-value are on the mortgages they lend, the more capital they have to hold. For example on loans at 90% loan-to-value, they need to hold around six times more capital than they do for loans at 60%.
As the market is starting to recover from a historically low base, it is making it exceptionally difficult for first time buyers to get on the housing ladder. The scheme should help to address this imbalance with first time buyers encouraged to join the scheme early.
Please contact Martin & Co Stevenage on 01438 920065 who can put you in touch with a trusted mortgage advisor who can help guide you through this new scheme.