UK Government to Confirm 'Your First Home' Loan Scheme for First-Time Buyers
Overview and Key Details of the 'Your First Home' Scheme
Announcement and Policy Objectives
Sept 26 (Reuters) - The British government said on Saturday its new equity loan scheme called "Your First Home" would be confirmed in next month's budget.
The policy, a revival of the "Help to Buy" scheme, is aimed at injecting growth into the economy by increasing demand for house building, as well as assisting first-time buyers.
Scheme Features and Eligibility
Here are some details:
Deposit and Loan Structure
• The government said the scheme was expected to support 2.5% deposits, backed by 20% government-backed equity loans for first-time buyers.
• Home buyers would receive an equity loan of up to 20% of the market value of an eligible new-build property, interest-free for five years, and the loan would need to be paid back in full on sale of the property, within 25 years or in line with the main mortgage.
Property Value and Mortgage Details
• Buyers could purchase a new-build property with a mortgage of 75% of the value of the property, with a value of up to £600,000.
Income and Price Caps
• The scheme will also set a household income cap with local property price caps to ensure support is targeted for those in need, the statement from the Ministry of Housing, Communities and Local Government said.
Developer Contributions
• Housing developers will be expected to make a contribution when signing up to the scheme to help cover costs, the statement added.
Background: Revival of 'Help to Buy'
• The scheme is a revival of the “Help to Buy” scheme that ran from 2013 till 2022, which helped over a third of a million people purchase a new-build home.
Reporting Credits
(Reporting by Chandni Shah in Bengaluru, Editing by Timothy Heritage)
