Autumn Statement 2015: London first-time buyers get Help to Buy boost

Tom Wilson
25 November 2015
First time buyers in London will see their prospects of stepping onto the housing ladder boosted by the launch of a new London Help to Buy Scheme.The Chancellor said Londoners with a 5% deposit will be able to get an interest-free loan for up to five years, worth up to 40% of the property’s value. The scheme will apply only to new-build properties worth up to £600,000, so up to £240,000 can be borrowed interest-free.The scheme could open up home ownership opportunities in the capital, bridging the gap between average prices and earnings in London.Adrian Anderson, director of mortgage broker Anderson Harris, explained: ‘’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.“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.Osborne also confirmed the nationwide Help to Buy equity loan scheme will be extended to 2021, and overall some £20 billion will be committed to housing in this spending period.First time buyer purchases increased by 60% between 2010 and 2014, according to the Office of Budgetary Resposibility.

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