Head of Research Nicola Almond discusses increasing interest in Help to Buy London.
This week’s Homes and Property reports that an increasing number of developments in London are being registered for the Government’s Help to Buy initiative.
It’s just over a month since the Government increased the upper limit on this equity loan scheme from 20% to 40% for all London boroughs, and an increasing number of homes are being registered for the scheme, as developers face an uncertain market.
The new rules make it possible to buy a new build property for up to £600,000 with a minimum deposit of 5%, a Government equity loan of up to 40%, and a mortgage of 55%. No fees are charged on the loan for the first five years of owning the property.
The scheme is open to home movers as well as first time buyers, although the property you are buying must be the only property you own at the time of purchase, and homes can’t subsequently be sublet.
Martin Fillery, director and Head of Shared Ownership at Currell, believes the Government is putting pressure on developers to offer London Help to Buy more widely as it tries to increase the amount of affordable housing in the capital.
“If they have seen any sort of slowdown in their sales rates it is a great way to open things up to a different audience,” he says.
Developers appear to be overcoming their fear that registering eligible units for Help to Buy could detract either from the appeal of a scheme or from the more expensive units within a development.
Head of New Homes Adrian Plant welcomes the increase in the equity limit, saying,
“At Currell we encourage developers to register for Help to Buy, as this offers many buyers a route to purchase which would otherwise not be possible”
With the triggering of Article 50 looming there is an increasing awareness that the market may lack direction for some time. Affordability remains a pressing issue, and registering properties for Help to Buy optimises both the appeal and the number of potential buyers, so is an obvious choice for eligible properties.