Second Phase of Help to Buy Scheme open to all!

As we move into 2014 people considering moving house should be aware of the Second Phase of the Government’s Help to Buy Scheme. Conveyancer Sophie Jones from Coodes Solicitors explains more.

The Second Phase means that moving in 2014 will be a more financially viable option for a greater number of people across the whole of the UK.

The First Phase provided assistance to first time buyers and buyers of new-builds only in the form of an equity loan.

However the Second Phase provides assistance not only to first time buyers but to all home movers on both existing and new properties as well as re-mortgages with a new lender.

The assistance is in the form of a ‘mortgage guarantee’ which is given by the government to high street lenders who participate in the scheme. There is no additional ‘equity loan’ and the mortgage will otherwise operate in the usual way with different lenders setting their own terms and rates.

The guarantee means that a) the lenders participating are prepared to provide 95% mortgages so that the buyer only needs to find 5% of the purchase price and b) it is likely that the rates should be cheaper than they have been for those buyers with small deposits.

There are certain criteria which apply:

• The maximum purchase price is £600,000.
• The property must be your only property.
• Payment of a 5% deposit must be possible.
• The mortgage is only possible on a capital repayment basis.
• The mortgage is not available for buy to let or second homes.

Therefore the GOOD NEWS for 2014 is that if you can fund a 5% deposit it is more likely you will be able to find a mortgage at a more affordable rate this year.

For more information on this issue please contact Jane Stewart or Sophie Jones on 01872 246200 or your local Coodes office.