New Government Housing Scheme Is Being Put In Place To Help First Time Buyers
It’s no secret that housing prices have been creeping dangerously high since the dreaded credit crunch hit us back in 2008. Judging by the 11.7% increase in prices we seen last year, there’s no sign of the boom slowing down anytime soon! The looming increase in interest rates, teamed with some strong efforts to tighten mortgage lending, has left potential first time buyers with no choice but to hold off getting their feet firmly on the property ladder.
If you’re an aspiring first time buyer yourself then help could soon be at hand! This week David Cameron has set out plans for a scheme to help 100,000 first time buyers receive new homes with a 20% discount to help them get their first step on the property ladder. Unfortunately, the ‘Starter Home Initiative’ won’t be available for registration until the beginning of next year, but for those of you just beginning your saving journey, this could be an ideal scheme to look into.
The Government have confirmed that the initiative will be open to first time buyers who are under 40 and the new homes are to be built in England over the next five years. Full details of the scheme are still being planned out, but councils and building firms have already offered their support so I have a feeling this proposition could be the start of something good!
At the moment the average house price for a first-time buyer is £218,000. That’s eight times the average income of 22-39-year-old employees! As a result of this, the average first time buyer is 30 years old and 90% of the time they can’t buy without financial help from their family. It doesn’t take a genius to work out that something needs to be done but hopefully the ‘Starter Home Initiative’ can answer a few prayers!
The Prime Minister himself says: ‘This is all part of our long-term economic plan to secure a better future for Britain, making sure we are backing those who work hard and get on in life. Hardworking young people want to plan for the future and enjoy the security of being able to own their own home. I want to help them do just that.’
Sounds pretty promising to me! For those of you who are serious about getting your first step on the property ladder in the near future, with or without the new 20% government scheme, I would recommend saving between 5 – 20% of the cost of the home you would like. Saving more than 5% will make it easier for you to apply for a wider range of cheaper mortgages!
I hope this has been helpful to some of you and I will keep you updated with any useful updates when I receive them!