Government Extends Forces Help To Buy

The government will extend an ownership scheme for the Armed Forces for a further two years. The Forces Help to Buy scheme, which offers an interest-free loan to military personnel of up to half their salary, will run until 2018. Michael Fallon, defence secretary, announced the extension yesterday as he revealed 10,000 service members had applications approved through the scheme which has run since 2014. He said 81% of the payments were made to ranks below officer. Read more on Inside Housing.

Help-To-Buy Loan Scheme Nets Treasury £213m In Paper Profit

Rising house prices across much of England mean a government scheme to help buyers of newbuild property may have made more than £200m for the Treasury in its first two-and-a-half years. The help-to-buy equity loan scheme gives buyers an interest-free loan for five years in return for a percentage stake in their property. When the home is sold, the buyer returns the same percentage of the sale price, meaning that any fall or rise in house prices affects the return. Analysis by Hometrack suggests that a surge in house prices means the total value of homes bought through the scheme since its launch in April 2013 has increased by more than £1bn.  Assuming each buyer took the maximum 20% loan to buy the property, Hometrack said the government’s stake is worth £213m on the £2.7bn it has put up through loans. Read more on the Guardian website.

Help To Buy... For The Rich

A new mortgage scheme offering huge loans to young homebuyers may be less useful than it seems, experts say. London Help To Buy is supposed to aid aspiring homeowners in the capital, where the average property costs £530,000. Borrowers can get loans from the Government of up to 40 per cent on new-build properties costing a maximum of £600,000. They still need a 5 per cent deposit and will have to qualify for a normal mortgage. To buy a £600,000 house, you would need to save £30,000. The Government lends £240,000 interest-free and you’d have to borrow the remaining £330,000 from a bank or building society. But to qualify for a big mortgage you’d need a huge income — £73,000 a year — more than double the average London salary. Read more on the Daily Mail website.

Private Renters to Get Interest-Free Loan Deposit Offer

A scheme that offers London workers an interest-free loan for their deposit on a rented home is to be rolled out across England.  Pioneered by the Mayor of London and housing charity Shelter last year, the scheme works like the season ticket loan programme already offered by many employers to help commuters pay for their travel costs in the capital. At an event to roll out the scheme, it was announced that The Co-operative Group will be the first major employer to offer it to their 70,000-plus employees across the UK. Read more on 24dash.

London and South-East Grab the Lion’s Share of Help to Buy

London and the south-east grabbed the largest share of Help to Buy loans, according to the latest figures showing more than 48,000 homebuyers have used the government scheme aimed at homebuyers with small deposits.  Adding to concerns that subsidies have triggered a surge in house prices, 7,501 buyers in the south-east and 2,837 in London have taken out either an interest-free loan on a new build home or used the mortgage guarantee that allows them to buy a home with only a 5% deposit. The popularity of the scheme in the south-east pushed the north-west into second place, where 6,180 buyers have completed a purchase. Read more on the Guardian website.

Council to Consider Homesteading Scheme for Empty Homes

Durham County Council is considering plans to offer long-term empty homes for sale at discounted prices. It has developed the ‘homesteading’ scheme, which will see two and three-bedroom homes for sale from as little as £18,000, in partnership with local housing providers. Members of the authority’s cabinet will be asked to agree to give the plans the go-ahead when they meet next week. If approved, the scheme would be introduced on a pilot basis, with 14 council-owned homes being offered for sale. The initiative could also see buyers offered an interest-free loan of up to £15,000 to carry out repairs and improvements. Read more on the Housing Excellence website.

Armed Forces Offered Interest-Free Home Loans

The government is to offer armed forces personnel buying their first homes interest free loans towards a deposit. Defence Secretary Philip Hammond announced that service men and women will be able to borrow an interest free amount of up to 50% of their salary to a limit of £25,000. The loan is repayable over 10 years and is designed to address the low rate of home ownership among the forces. The scheme will start on 1 April 2014 and covers a three-year period. Read more on the Conservative Party website.

Help To Buy Will Increase Supply As Well As Demand

The government’s controversial help to buy scheme will increase housing supply as well as demand, the chief executive of the Homes and Communities Agency has insisted.  The scheme, under which buyers are offered an interest free loan on 20 per cent of a new build property’s value, has led to fears it will fuel house price inflation without boosting demand.  Mr Rose said there have been 10,000 reservations in the first four months of the scheme and it has involved 700 housebuilders and has the backing of all the major mortgage lenders. Read more on Inside Housing.