How Avail Mortgages Can Help You

In an effort to fix the ‘broken housing market’ in England, Chancellor of the Exchequer, Rishi Sunak, announced on Wednesday 3rd March, during his all-important budget speech, plans to introduce a new 5% mortgage scheme*, which is similar to the Help To Buy scheme that was introduced back in 2013*.

On the mortgage guarantee scheme, Sunak said: “Lenders who provide mortgages to homebuyers who can only afford a 5 per cent deposit will benefit from a government guarantee on those mortgages*… A policy that gives people who can’t afford a big deposit the chance to buy their own home.”

“As the prime minister has said, we want to turn generation rent into generation buy.”, he added.

This scheme was first mentioned back at the virtual Conservative conference in 2020, Prime Minister Boris Johnson looked to drum up enthusiasm about this type of mortgage deal* and how it can help young people, in particular, find their new starter home.

Here at Avail Mortgages, we’re passionate about helping people in local areas such as LeedsYork and other places in Yorkshire such as Wetherby, Keighley and Halifax find their first home. Since 2018, we’ve embraced government ownership schemes such as these and look forward to helping you understand this new scheme so you can take advantage of it to create a mortgage plan that works for you. For more information about this upcoming scheme and how it can help first-time buyers in England, be sure to fill out the contact form on this page.

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    'Generation Buy': How Does The Mortgage Guarantee Scheme Work?

    This new first-time buyer scheme is designed to help up to two million people who are looking to make the switch from renting or living with their parents, to owning a house* and setting up a mortgage payment.

    The scheme will allow wannabe homeowners to take out a 95% loan to value (LTV) on property and housing, meaning they only need to put down a 5% deposit* to be accepted by mortgage lenders. These low-deposit mortgages drastically reduce the amount of money people need to save up to offer as a deposit on a home that they wish to buy.

    government scheme* such as this may make homeownership for people a little easier and relax the stress tests put upon people by banks who are nervous about the risks involved in lending to people with insufficient funds. Experts say the current situation is hindering people, particularly the self-employed, and if these sorts of tests were relaxed, it might see more people be able to afford the purchase price and the monthly repayments* of their dream home.

    Sunak has said that the scheme will involve the government in England shouldering some of the loan risk burdens by way of a state guarantee, which helps people on lower incomes afford the deposit.

    How Much Deposit Do I Need For A House In The UK?

    In general, people living in England, Wales, Scotland and Northern Ireland will need to save between 5% and 20% of the overall cost* of the home that they are wishing to purchase. This a broad range of figures and the specific percentage amount depends on local areas and locations across the UK. For instance, a property or a new build home that’s based in the centre of London may well require a higher deposit percentage compared to a small town in Northern Ireland which isn’t as populous.

    If you take the average house price in England – which is around £256,000 – and were told the deposit was 15%, you would need to save up to £38,400*. It’s easy to see why this scheme, which is similar to Help To Buy,* is so popular because if you took that same figure and reduced the deposit percentage to 5%, the amount needed to save up would be £12,800. Still, a great deal of money, but a £25,600 discount is not to be ignored.

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    How Avail Can Help You Get On The Property Ladder With This 95% LTV Mortgage Scheme

    Our 35 years of combined experience helping people in the local areas of HarrogateBradford and other nearby places such as Huddersfield and Sheffield find suitable mortgages with affordable monthly repayments makes us confident that we can help you benefit from this new scheme, which is due to roll out soon. We can also help with various other types of mortgages packages, such as New Build Home Mortgages and Help To Buy Mortgages – both of which we offer here at Avail Mortgages.

    If you have got the money together for a deposit, are first-time buyers, have found your dream home and want to work with a group of mortgage brokers to help you find a mortgage deal using a seamless, fuss-free process, then be sure to get in touch, fill out the contact form on this page, or call us on 0330 118 0383 – our team would be delighted to hear from you, and be only too happy to help.