This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
In the Autumn Statement, the Help to Buy scheme was altered slightly to assist first-time buyers looking to purchase property in the capital.
The scheme is very similar to the existing Help to Buy equity loan, but now, those looking to buy in London can borrow up to 40% of the home’s value, instead of the previous 20%.
Changes
London Help To Buy will apply to new properties worth up to £600,000 in any of the capital’s boroughs and the City of London. Applicants have to be eligible for a mortgage in order to qualify for the scheme. In addition, mortgages must be for at least 25% of the overall property value.
Adrian Anderson, director of mortgage broker Anderson Harris, commented that, ‘Help to Buy has been hugely successful across the country but hasn’t had such a big impact in the capital because property prices are that much higher. Offering a 40% interest-free loan to London buyers will make a huge difference, enabling many to get on the housing ladder when they simply couldn’t before.’[1]
London Help To Buy Scheme Announced
‘Take the example of a one-bed flat in Camberwell on the market at £360,000. A 5% deposit works out at £18,000 but if you don’t buy via Help to Buy, you then need to raise a mortgage for the remainder, which requires earnings of circa £85,000, pricing out many buyers,’ Anderson continued. ‘Under London Help To Buy, a 40% interest-free loan would be available, leaving you with a mortgage of just £198,000 to raise. This could be done with an income of £50,000, which is much more achievable in the capital,’ he concluded.[1]
[1] https://www.landlordtoday.co.uk/breaking-news/2015/11/london-help-to-buy-scheme-launche
