£250m plan to get first-time buyers on to property ladder

First-time buyers struggling to raise a deposit received a budget boost with the announcement of a new scheme to help them get on to the property ladder.

The Government has earmarked £250m from the Bank Levy to help around 10,000 households with incomes of up to £60,000 buy a new-build property.

Under the FirstBuy initiative, buyers must save a deposit worth five per cent of the property’s value, with the Government and housebuilders putting up 10 per cent each through an equity loan, enabling people to qualify for 75 per cent loan-to-value mortgage. The equity loan will be interest-free for the first five years.

The Government hopes the scheme will also provide a boost to the construction industry and support up to 50,000 jobs, after the number of new homes that were built fell to their lowest peacetime level since 1923 last year.

The initiative is almost identical to the Homebuyer Direct scheme that was launched by the previous government in 2009. Around £275m of funding was made available for that project and it has helped 9,000 people to buy their first home.

The Council Of Mortgage Lenders welcomed the announcement, saying it would provide ‘modest help’ for first-time buyers.

A spokeswoman said: “Every little helps, but it is not going to fundamentally change the landscape.”

Claire Jarvis, sales manager for Persimmon Homes North West, said: “We recognise how important first-time buyers are in sustaining the property market and the prediction that FirstBuy is expected to help 10,000 families get on to the property ladder is welcome.”

John Cosgrave, managing director of Warrington-based, Arley Homes, said the policy will be some benefit to the market as a whole but would not impact Arley directly:

“The Government has made a commitment to help get the market moving, which is something we have long been calling for, and I’m glad to see it comes in the form of practical support for first time buyers who are in desperate need of help and are the foundation blocks of the housing market.

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Local councils to offer first-time buyer mortgage support

Fifteen local authorities team up with Lloyds TSB in a scheme to top-up first-time buyers’ deposits

First-time buyers who are unable to call on the bank of mum and dad to boost their deposit may now be able to turn to their local council instead.

Fifteen local authorities, including East Lothian, Blackpool, Newcastle-under-Lyme and Warrington, have agreed to put money in a Lloyds TSB scheme to top up the deposits of first-time buyers trying to buy a home in their area. The scheme, called Local Lend a Hand, allows first-timers to buy a home with a deposit of as little as 5%.

Raising a deposit is one of the biggest hurdles for first-time buyers since the 2007 banking crisis, with many lenders refusing mortgages to those whose savings are less than 20% of the value of the property they want to buy, and offering the lowest rates to those with deposits of 25% or more. The requirement for a big deposit has relaxed recently with more lenders willing to provide mortgages worth 90% of a property’s value, but only two – Yorkshire Bank and Skipton building society, via its estate agency subsidiary Connells – will lend up to 95%.

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House prices fall 2.8% year-on-year

Halifax house prices index shows decreases in yearly, quarterly and monthly measures giving an average house price of £162,657

House prices fell by 2.8% over the the year to February, according to the Halifax – the biggest annual fall since October 2009.

The bank reported a monthly change of -0.9% in house prices and a quarterly change – lenders’ preferred measure – of -0.4%, leaving the average house price at £162,657.

But Martin Ellis, housing economist for the Halifax, downplayed the falls saying there had been little change in house prices over the first two months of 2011, with this month’s 0.9% fall offset by January’s 0.8% gain.

“Overall, we expect a modest 2% decrease in house prices in 2011. Uncertainty over the economic outlook is likely to weigh down on housing demand this year,” he said.

“Fewer properties have been coming on to the market in recent months. This trend, if sustained, should improve the balance between demand and supply and help to prevent a more significant fall in house prices.”

The ratio of average house price to national average earnings for a male working on a full-time basis is also at its lowest point for a year, standing at 4.46 compare to 4.63 in February 2010.

Earlier this week, Robert Gardner, chief economist for Nationwide building society, said the low number of first-time buyers was “casting a shadow” over the housing market.

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Chorley Building Society confirms acceptance of the Build-Zone 10 Year Warranty for lending purposes

The Risk & Compliance Committee at Chorley Building Society has today confirmed the society’s acceptance of the Build-Zone 10 Year Warranty for lending purposes.

The competitive range of structural warranties on offer from Structural Warranty product provider Build-Zone provide cover for all areas of house building, social housing and commercial development as well as completed and self-build developments.

Designated Warranty Link Scheme

The Build-Zone Structural Warranty products provide cover against defects in the design, workmanship or materials of building projects. The wide range of warranty products on offer from Build-Zone will suit most types of development and includes a New Home Warranty which has achieved Designated Warranty Provider status (DWS) in respect of the Warranty link Rule (WLR) by Communities and Local Government (CLG). This enables builders and developers to consider the Build-Zone Housing Warranty as an alternative mainstream warranty provider.

For more information on the range of warranty products, visit the site www.build-zone.com : or look at the Structural Warranty product range for the following types of project:

  • New Home Projects
  • Social Housing Projects
  • Commercial Projects
  • Completed Housing Projects
  • Self-Build Projects
  • Receivership & Administration Projects

House builders, self builders and commercial builders and developers now have more choice than ever when it comes to selecting structural warranty cover on the properties they are building, extending or refurbishing and converting. Build Zone offers a wide range of innovative, flexible and competitive structural warranty cover options. Call and arrange a quick quote today on 0845 230 9873.

About Buildzone:

Build-Zone is the scheme administrator of the Build-Zone range of warranty products and is a trading style of Sennocke International Insurance Services a business that has been trading in excess of 20 years. Build-Zone has been providing structural warranties since 2003 and is rapidly expanding to become a major force in the provision of structural warranty products across the UK and Ireland. An in-house IT development team utilise technology to improve the efficiency of all areas of the Build-Zone business. In 2010, Build-Zone was approved by the Department of Communities and Local Government as a Designated Warranty Provider for the purposes of the Warranty Link Rule.

Lenders

Build-Zone is widely accepted by banks and building societies in the UK and we are continually updating lenders on the products we supply and the coverage provided.

Contact Details:

Build-Zone

Anton House,
South Park,
Sevenoaks,
Kent, UK
TN13 1EB
Telephone: +44 (0)845 230 9873
E-mail: sales@build-zone.com

www.build-zone.com

For interviews or comments, please contact our PR agency: SMPR (Simply Marcomms Limited) 0870 199 4044 Email: info@simplymarcomms.co.uk

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List of Lenders – Banks & Building Societies

Build-Zone is widely accepted by banks and building societies in the UK and below is a list of the lenders that currently accept Build-Zone. We are continually updating lenders on the products we supply and the coverage provided. In addition, Build-Zone has been approved as a Designated Warranty Scheme provider for the purposes of the Warranty Link Rule by Communities and Local Government.

If you have a query about a lender that is not listed here contact us on 0845 230 9873 or email info@build-zone.com

Alliance & Leicester
Accord Mortgages
Barclays Bank PLC
Birmingham Midshires (HBOS Group)
Chelsea Building Society
Cheltenham & Gloucester
Cheshire Building Society
Co-Operative Bank
Coventry Building Society
Cumberland Building Society
Ecology Building Society
Halifax plc (HBOS Group)
Hanley Economic Building Society
HBOS Group
Holmesdale Building Society
Kent Reliance Building Society
Leeds Building Society
Lloyds TSB Mortgages
Mansfield Building Society
Marsden Building Society
Melton Mowbray Building Society
Nationwide Building Society
Natwest Mortgage Services
Northern Rock
Norwich & Peterborough Building Society
Royal Bank of Scotland
Santander UK PLC
Scottish Building Society
Scottish Widows Bank Plc
Skipton Building Society
Stroud & Swindon
TMB (HBOS Group) UCB Homeloans
Yorkshire Building Society

For more information about Structural Warranties, 10 Year Structural Warranties, contact the Build-Zone team on (0)845 230 9873 or email sales@build-zone.com

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