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In an effort to fix the ‘broken housing market’ in England, Prime Minister, Boris Johnson, recently announced plans to introduce a new 5% mortgage first-time buyer scheme, according to The Daily Mirror, which is similar to the current Help To Buy scheme which was introduced back in 2013.

Speaking at the virtual Conservative conference, Prime Minister Boris Johnson spoke about turning “generation rent into generation buy”, in a bid 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, 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': What Is Boris Johnson's New 5% Deposit Mortgage Scheme About?

    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.

    There is currently very little information about this new scheme out there, though one potential route for it could be the relaxation of a process called the “stress test”. This is a test that bank’s across England, Wales, Scotland and Northern Ireland use to decide whether or not to lend to a person. Eligibility criteria, such as income, potential mortgage repayments and credit score are included in stress tests and are vital steps in the quest for homeownership.

    government scheme such as this may relax those tests and make homeownership for people a little easier. 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.

    Johnson 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.

    Overall, the hope for this sort of scheme is that it allows banks, who are becoming more risk-averse as a result of coronavirus, to again offer 95% mortgages.

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    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 £38,400. It’s easy to see why a scheme similar to Help To Buy is so popular because for instance, if you took that same figure and only needed a 5% deposit, 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.


    How Avail Can Help You Get On The Property Ladder

    Our 35 years of combined experience helping people in the local areas of Harrogate, Bradford and other nearby places such as Castleford, Ilkley and Selby 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 in the next few years. 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.


    Get In Touch With Avail Today

    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 01484 556 245 – our team would be delighted to hear from you, and be only too happy to help.