The government will make £250 million available in shared-equity mortgages for people wishing to buy newly built homes, creating up to 40,000 construction industry jobs
Called ‘Firstbuy Direct’ the programme is expected to help 10,000 people get on the housing ladder, offering first-time buyers below a certain income threshold access to a 25 per cent equity loan.
The government will put in 10 per cent and the housebuilder another 10 per cent while the buyer will have to find a 5 per cent deposit and the other 75 per cent through a loan and savings.
It is estimated Firstbuy Direct could create 40,000 jobs.
Announcing the policy as part of his budget speech in the House of Commons today, Chancellor George Osborne said: ‘Average mortgage deposits are close to 30% and this puts home ownership beyond the reach of many many families.
‘From the proceeds of this year’s bank levy we will fund a £250 million commitment to first-time buyers. A new shared equity scheme, First Buy, will be available for first-time buyers who want to purchase a newly built property, but who cannot afford the high deposits.
‘This will help 10,000 families get on to the housing ladder for the first time.’
Stewart Baseley, chairman of the Homebuilders Federation, described the policy as a ‘shot in the arm’ for housing.
He said: ‘We are pleased the Government is listening to industry concerns and has recognised the economic and social benefits of building more homes.
‘With Firstbuy the Government has stepped up with a policy that will help first time buyers, boost economic growth and provide a vital shot in the arm for the house-building industry.’
‘The Chancellor’s commitment to switch to a “presumption in favour of sustainable development” based planning system, where the default answer is “yes”, is also a positive statement of intent.
‘If the Government is to meet its commitment to increase housing supply, more permissioned land must be made available.’