In the current economic climate it seems increasingly difficult for first-time buyers to even think about getting a foot on to the property ladder and these days more and more people are opting to make the most of their space in Mum and Dad’s house, staying put until they have enough for a deposit. However, a new government initiative aims to change this by helping struggling first-time buyers make their first purchase by cutting the necessary deposit amount to 4% down from up to 25-30%.
This new scheme, called the FirstBuy Scheme was announed in the March budget and will see the government collaborate with housing developers to provide a 5 year interest free loan that will cover 20% of the property’s purchase price leaving the remaining 5% of the deposit needed in the hands of the first-time buyer.
Since the start of the recession around 3-4 years ago it has been almost impossible for first-time buyers to do anything about owning their own property with soaring deposits. Many have resigned themselves to not getting on the property ladder until well into their thirties and needing to take on more and more work to even be able to do that.
With the new FirstBuy Scheme first-time property buyers will need much smaller deposits from around £5,000 with lower mortgage repayments too and the offer is open to those with a household income of less than £60,000 and buying a property for the first time. The properties applicable to the new offer must also be new homes and these have limited availability with the first ones coming on to the market this month.
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