Liquid error: wrong number of arguments (2 for 1) Help To Buy Enters Second Phase | Marsh & Parsons Sales and Lettings Estate Agents London

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Help To Buy Enters Second Phase

Sun 06 Oct 2013

The Government's new Help to Buy scheme will enable people to buy a home with a deposit of less than 10,000

in more than half of regions across country, a property website has found.

Aspiring home buyers will from this week be able to start applying for the second phase of the flagship initiative,

which will offer state-backed mortgages to UK borrowers with deposits as low as 5%.

The scheme, which has sparked fears of a new housing bubble, will give people a helping hand to buy a new or

existing home worth up to 600,000.

The launch means the average buyer will be able to get on the housing ladder with a deposit of less than 10,000

in six out of 10 regions across England and Wales, analysis by found. These are the North East, the

North West, Yorkshire and the Humber, the West Midlands, the East Midlands and Wales.

With the average asking price standing at 222,168 across England and Wales in October, Zoopla found that the

typical size of a 5% deposit needed across the country would be 11,108.

Currently, there are around 665,000 properties on the market with asking prices under 600,000 which could be

eligible for Help to Buy and the scheme would have the potential to knock 22 billion off home buyers' deposit

requirements, Zoopla calculated.

London home buyers, at around 16,103, will still need to find the most money under Help to Buy - while those

living in Yorkshire and the Humber will need to find the least cash, at 8,129 typically, according to the website.

Recent studies suggest that Help to Buy will considerably ramp up the appetite for home buying in the coming

months. One-third of people who are considering buying a home in the next year plan to turn to the scheme,

according to a recent survey by Santander.

But experts have warned that many people will be left disappointed as lenders will still have tough rules in place

to make sure that they can afford to pay their loan back.

State-backed lenders Royal Bank of Scotland (RBS) and Lloyds Banking Group, which together account for about

one third of the mortgage market, have confirmed they will be taking part in the initiative, after the launch was

brought forward from next January.

But several other major mortgage providers are still want to know further details about the costs and benefits of

the scheme before deciding whether to add their names to the list.

The initiative, which is set to run until January 2017, will see the state offer guarantees totalling around 12 billion

to unlock 130 billion of high loan-to-value mortgage lending.

Phase two of Help to Buy will initially be available under the NatWest, RBS and Halifax brands. RBS/NatWest

plans to help 25,500 buyers through the scheme over the next three years and it will extend its opening hours to

meet customer demand.

Customers who get access to these mortgages will be able to draw down funds as soon as they are approved and

will not have to wait until the original launch date of January.

Another lender, Aldermore, which accounted for 0.3% of the mortgage market in 2012, has said it plans to come

on board in January.

Several experts have argued that the Government should ditch the second phase of Help to Buy, which they fear

will artificially inflate house prices too highly by ramping up demand at a faster rate than the supply of homes

coming on the market.

Mortgage availability has already become much more widespread following the launch of the Government's

Funding for Lending scheme in August last year, which gives lenders access to cheap finance in order to help

borrowers. T he first phase of Help to Buy is an equity loan scheme which gives people buying a new-build

property a helping hand.

Lenders have recently seen first-time buyer numbers reach their highest levels in more than five years. House

prices in London are around 10% higher than they were a year ago, although the market remains patchy and

some parts of the country are only just starting to see prices turn around following the financial downturn.

Peter Rollings, CEO of London-based estate agent Marsh & Parsons, said the new phase of Help to Buy will be "

like a shot of adrenalin".

He said of the London market: "The capital needs this stimulus to free up mid-ladder buyers who want to become

first time sellers.

"This will create a much healthier balance between supply and demand."

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