The Council of Mortgage Lenders (CML) has requested that the Government should ensure that their Budget, to be announced in April, should expand the HomeBuy Direct mortgage scheme so more people can enrol.
The scheme is designed for first time buyers earning less than £60,000 per year and allows them to borrow 100 per cent of a new build home. 70 per cent of the property loan is from a mortgage lender and the other 30 per cent is shared between the property developer and the government itself.
The scheme was launched in September 2008 and was expected to help around 18,000 first time buyers. However, almost 360,000 first time buyers entered the market in 2007 and demand for the scheme was almost triple that which was expected, according to Housing Minister Margaret Beckett. One of the developers, Barratt Homes, said they had 20,000 buyers register interest with them alone.
Ray Boulger, of John Charcol, a mortgage adviser firm, said: “Buyers who want to get on the property ladder do not have a problem with borrowing at 100 per cent. However, the biggest drawback is that it is only available on new-build properties. The hope is that in five years time the market will have improved and house prices will begin to rise.”
Schemes like this are ideal to help people get onto the property ladder.