The 2013 Budget included a number of plans that will impact on the property market, a few of these are:
Help to buy initiative & the Battersea Power Station
The Chancellor made an early nod to the regeneration of Battersea Power Station, a project that will bring a huge number of new homes to the UK market.
This was a sentiment he expanded on later as he detailed the two main aspects of the government’s “help to buy” plan.
Help with deposits
The Chancellor said home ownership was a key aspect of our “aspiration nation”. He said the deposits demanded for a mortgage put home ownership beyond the reach of the great majority.
He committed £3.5billion of capital spending over the next three years to shared equity loans.
From the beginning of next month an equity loan worth up to 20% of the value of a new build home will be offered to anyone looking to move up the housing ladder.
This basically means that individuals that put down a 5% deposit from their savings could receive a loan of a further 20% from the government.
The loan is interest free for the first 5 years.
Not just help for first time buyers
Whilst previous help was only available to first time buyers, with family incomes below £60,000, now help is available to all buyers of new build homes, regardless of income. It is available to anyone looking to get on, or move up, the housing ladder and the only constraint will be that the house can’t be worth more than £600,000.
Funding for lending
The Chancellor said:
“We will offer a new mortgage guarantee. This will be available to lenders to help them provide more mortgages to people who can’t afford a big deposit. “
He said they had worked with some of the biggest mortgage lenders to make this right and would be offering guarantees to support £130 billion of mortgages.
These will be available from the start of 2014 and run for three years. Any future government would need permission of Bank of England if they want to extend the scheme.
As well as improved finance the Chancellor mentioned an increased investment in new homes.
He said: “We also set up more plans for housing. Plans to build 15,000 more affordable homes , plans to increase fivefold the plans to build for rent and plans to extend right to buy so more tenants can buy their home.“
Article & Analysis courtesy of Ruth Matthew, 20th March 2013 Today’s Conveyancer
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Ola Kupoluyi, Partner
Ola Leslie Solicitors