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

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Help To Buy 2 Ready To Launch

Mon 07 Oct 2013

First-time buyers will be able to scrape together a 5 per cent deposit to buy a home (Picture: PA). The second phase of the Governments Help to Buy scheme will inject a shot of adrenalin into the housing market when it launches today.

Help to Buy 2 allows lenders who want to offer 95 per cent mortgages to buy a guarantee from the government for up to 15 per cent of the loan, so they do not to take on all of the risk. Some 665,000 homes on the market are eligible for the scheme and borrowers will need to put down a 5 per cent deposit.

With the average asking price 222,168, its a boost to first-time buyers, who could have to stump up as little as 10,000 deposit in six out of ten regions in England and Wales. Bringing forward of the Help to Buy scheme will help to stimulate the UK housing market over the short term like a shot of adrenalin, said Peter Rollings, CEO of Marsh & Parsons. Outside London the market desperately needs this impetus as prices have risen anaemically for some time but in real terms they havent risen for a number of years. But in London over the last 12 months we have seen price increases of between 10 and 15 per cent. The capital needs this stimulus to free up mid-ladder buyers who want to become first time sellers and this will create a much healthier balance between supply and demand.'

Under the scheme the government will compensate the lender if the property is repossessed and it is unable to recover money, for losses above 80 per cent of the original purchase price. The lender will also have to take a 5 per cent hit, to ensure it does not offer risky loans. It is expected the scheme could reduce total deposit requirements by 22.1billion and help thousands more would-be buyers become home owners.

It has been feared the scheme would help create a housing bubble and a report out today (TUE) has indicated house prices look likely to surge further ahead in property hotspots as the supply of homes lags behind demand. Home sales in the UK reached a four-year high last month, according to the figures, as surveyors on average saw 18.7 transactions each in the three months to September, the figures from the Royal Institution of Chartered Surveyors (Rics) show.

While the level remains historically low, it is the strongest since November 2009 and it is thought the market has been boosted by the Governments Help to Buy initiative. Peter Bolton King, Rics global residential director, said: Its encouraging that the market is starting to improve inall parts of the country with more buyers looking to make a move and more sales going through.

The report said Help to Buy had a key role in driving the housing market recovery, together with the Bank of Englands Funding for Lending scheme to ease borrowing conditions. It added: London and the South East remain the areas under the greatest price pressures with the overwhelmingnumber of respondents in each region pointing to price rises.

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