Grant Shapps launched the new FirstBuy scheme, specifically designed to help those struggling to buy their first home due to the need for large deposits.
He confirmed that over 100 housebuilders will take part by offering their new-build homes to first-time buyers. Through FirstBuy, the Government and housebuilders together will offer a 20 per cent equity loan, which alongside a five per cent deposit from the buyer will enable them to take out a 75 per cent mortgage on the rest of the property.
Loans will be repaid on resale of the property, with the Government’s share available for reinvestment in more affordable housing. The first homes are expected to come on stream in September this year.
Grant Shapps has said that FirstBuy could help up to 15,000 people across the UK in its first two years, with up to £500 million being available across the UK. In addition, because the scheme is only available on new-build properties, it will offer a much-needed shot in the arm to the housing market and the construction industry – supporting thousands of jobs.
Grant Shapps said: “With 80 per cent of young first-time buyers depending on parental help, I am determined that we pull out all the stops to help those who want to take their first steps onto the property ladder.
“FirstBuy will do just that – a Government-backed scheme making £500 million available to offer a valuable alternative to the Bank of Mum and Dad. Over the next two years, this will help as many as 15,000 people in England to get that much-needed deposit together and realise their dreams of owning their own home.”
Supporting the scheme Stewart Baseley, executive chairman of the Housebuilders Federation, said: “Firstbuy will help first time buyers, boost economic growth and provide a vital shot in the arm for the house-building industry. Our members have reacted decisively to support FirstBuy and recognise the scheme is an important first step.”
