Karl Hick, managing director of Larkfleet Homes (www.larkfleethomes.co.uk), is urging home buyers to take advantage of government schemes which will help them to pay for new homes.
Writing on the EasternNewHomeBuyer blog (www.easternnewhomebuyer.wordpress.com) he says:
“When you are looking for a new home to buy you have two options – you either purchase one that has been previously lived in by someone else or you buy a brand new home from a builder.
“With the financial incentives now being offered by government to people who buy new-build homes, there is a powerful argument in favour of taking advantage of that help and buying new.”
In his article he points out that one of the biggest obstacles to buying a home – new or used – is raising the finance. For first-time buyers there is often a particular problem in putting together the deposit needed to raise a mortgage.
The government’s NewBuy and FirstBuy schemes make government cash (and money from the housebuilding industry) available to purchasers.
NewBuy is the government-backed ‘mortgage indemnity’ scheme that allows people to get a mortgage with a deposit of as little as five per cent of the purchase price. The lenders participating in the scheme – which includes many of the big banks and building societies – will provide a mortgage of up to 95 per cent of the purchase price to borrowers who meet their qualifying criteria.
FirstBuy is an ‘equity loan’ arrangement where the government and the builder provide a loan (interest free for five years) to cover up to 20 per cent of the purchase price.
Many housebuilders also have their own schemes to help buyers. Some of these can work alongside the government schemes and others are available for people who don’t qualify for government help.
Karl Hick points out: “None of this financial help, of course, is available when buying a second hand home.
“The government is funding NewBuy and FirstBuy to help tackle the ‘housing crisis’ – the fact that many more people want a home than the number of homes available at prices they can afford.
“The government is also aiming to help stimulate the economy through the building of new homes.
“For would-be purchasers, though, government economic policy is rather less important than the fact that there is financial help available if you are buying a new-build home. It makes good sense to take advantage of that help.”