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Low Rates for House Buyers with Launch of London Help to Buy Scheme

Posted by Marites Alma Christiansen on Feb 08, 2016 11:50 AM EST
First Anniversary Of Help To Buy more big
BRISTOL, ENGLAND - OCTOBER 08: A Help to Buy sign is seen outside a new housing development on October 8, 2014 in Bristol, England. On the first anniversary of the introduction of second phase of the Help to Buy scheme, which provides a government partial guarantee on high loan-to-value mortgages, a new survey from the The Centre for Economics and Business Research (CEBR) claims that house prices in 2015 are set for their first decline since 2011. (Photo : Matt Cardy/Getty Images)

London's newest help to buy program has already released its first set of mortgage rates at just below 2 percent, in a Telegraph UK report.

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Coming in at 1.55 percent, the London housing scheme was devised as a continuation of the existing equity loan scheme. With the introduction of low mortgage rates, first-time house buyers are given the opportunity to purchase newly-built units up to £600,000 with access to loans at zero interest.

However, for those regions outside of London, a 20 percent loan amount is added on top the property purchase price, aside from a minimum 5 percent deposit.

With the new Help to Buy scheme, Londoners can be granted up to 40 percent as a government loan with a required 5 percent deposit. Help to Buy rates for different banks in line with the scheme was transparently explained, still in the same report.

In another report from the Guardian, Brandon Lewis, UK Housing Minister, said, "Help to Buy has now helped over 130,000 people across the country achieve their aspiration of buying a new or bigger home. The scheme is helping people turn those dreams into a reality with a fraction of a deposit they would normally require, and from today the new London scheme will help even more people follow in their footsteps."

Taken in part from the £8.6bn budget, funding for the said scheme was allocated in the hope of extending April 2016's Help to Buy equity loan scheme, set to end by March 2021.

Meanwhile, an estimated 3,548 households were reported to have utilized an equity loan to purchase properties as of September last year. In turn, the UK government is optimistic on the idea that more than 10,000 consumers are slated to benefit from the latest housing scheme starting this year, according to the same report.

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