Martin Lewis details the basics of mortgages for homebuyers
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High street banks and other lenders are taking part in a Treasury scheme to boost recovery from the pandemic. Ministers say the move will help young families get on the housing ladder after years of facing unaffordable prices due to a squeeze on lending. Housing Secretary Robert Jenrick said: “Together we can turn generation rent into generation buy.”
A survey commissioned by the Government today suggests a property market surge is looming as months of Covid lockdowns have increased the demand for home ownership.
Two-thirds of renters and nearly three-quarters of those living at home want to buy. Most say the pandemic has made them more aware of the benefits.
It also found around three-quarters of private renters and 70 percent of those living at home have started saving for a deposit or put more money into their savings.
Chancellor Rishi Sunak said the scheme would mean many more products will become available. “This will boost the sector, creating new jobs and help people achieve their dream of owning their own home,” he said.
He announced the scheme in his Budget last month.
Successful applicants will be able to buy a house worth up to £600,000 with a deposit equivalent to five percent of the property’s price.
It is available to first-time buyers and homeowners looking to move.
The Treasury is to guarantee the loans, which will be subject to the usual affordability checks.
Lloyds, Santander, Barclays, HSBC and NatWest will be offering them from today. Virgin Money is due to join in from next month.
Mr Jenrick said: “For too many people, no matter how hard they work, home ownership can seem out of reach.
“One of the biggest divides in our country has been between those who can afford their own home and those who cannot.”
“That’s why we are determined to do everything we can to help hard-working families and prospective first-time buyers get their feet on the housing ladder in an easy and affordable way – to help to level up this country.”
He said the scheme would help families and young people “get on the property ladder without the prohibitive burden of a large deposit”.
The scheme follows Boris Johnson’s 2019 manifesto pledge to build 300,000 new homes a year in his drive to “level up” the countryy.
Other initiatives to help families to get on the housing ladder include Help to Buy, Share Ownership and the First Homes Scheme.
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