Help to Buy Scheme

Friday 3rd January 2014

The second part of the government-backedHELP TO BUY scheme, which aims to help people to buy a home, is set to go live thismonth. 

The scheme will be available to bothfirst-time buyers and those looking to move home.  All you need is a reasonably clean credithistory, and a 5% deposit.

The scheme enables lenders whowish to offer mortgages of up to 95% loan-to-value, but are cautious ofaccepting all the risks of high loan to value products, the opportunity to buya Guarantee from the Government for up to 15% of the loan. The scheme isavailable against both new-build and existing homes with a value not exceeding £600,000.

The Guarantee covers cases ofrepossession occurring within seven years of the date of the mortgage and compensationis payable to the lender only if the sale proceeds achieved on repossession areless than 80% of the original purchase price.

So for example, if the purchaseprice of a property is £100,000.00, compensation would only be awarded if theproperty is sold for less than £80,000.  Soif a price of £65,000 is achieved, then the lender would be compensated in theregion of £15,000.

 Suzannne Broughton (PropertyLawyer)

Howard & Over LLP are pleasedto welcome a new edition to their growing Residential Department which is alsobased in Ivybridge Plymstock and Devonport. Suzanne specialises in residentialsales and purchases. Please feel free to contact Suzanne on 01752 284053 or byemail: [email protected]