UK to confirm homebuying loan scheme in October budget

By Reuters News

Sept 26 (Reuters) - The British government said on Saturday its new equity loan scheme called "Your First Home" would be confirmed in next month's budget.

The policy, a revival of the "Help to Buy" scheme, is aimed at injecting growth into the economy by increasing demand for house building, as well as assisting first-time buyers.

Here are some details:

  • The government said the scheme was expected to support 2.5% deposits, backed by 20% government-backed equity loans for first-time buyers.

  • Home buyers would receive an equity loan of up to 20% of the market value of an eligible new-build property, interest-free for five years, and the loan would need to be paid back in full on sale of the property, within 25 years or in line with the main mortgage.

  • Buyers could purchase a new-build property with a mortgage of 75% of the value of the property, with a value of up to £600,000.

  • The scheme will also set a household income cap with local property price caps to ensure support is targeted for those in need, the statement from the Ministry of Housing, Communities and Local Government said.

  • Housing developers will be expected to make a contribution when signing up to the scheme to help cover costs, the statement added.

  • The scheme is a revival of the “Help to Buy” scheme that ran from 2013 till 2022, which helped over a third of a million people purchase a new-build home.

Capital.com is an execution-only brokerage platform and the content provided on the Capital.com website is intended for informational purposes only and should not be regarded as an offer to sell or a solicitation of an offer to buy the products or securities to which it applies. No representation or warranty is given as to the accuracy or completeness of the information provided.

The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.

To the extent permitted by law, in no event shall Capital.com (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk.

Any information which could be construed as “investment research” has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.