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First-time buyers should be wary of new mortgage schemes
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Published by The Independent on Sunday, 26 June 2011 by Chiara Cavaglieri
The latest methods to get people into the housing market will be suitable for some buyers but there are a few pitfalls. Chiara Cavaglieri reports
It has been a red-letter week for the UK property market, with the Government’s FirstBuy initiative opening up to first-time buyers (FTBs) and the announcement that mortgage and investment firm Castle Trust will launch its partnership mortgages later this year.
It has been a red-letter week for the UK property market, with the Government’s FirstBuy initiative opening up to first-time buyers (FTBs) and the announcement that mortgage and investment firm Castle Trust will launch its partnership mortgages later this year.
While innovative new products that aim to breathe life into the housing market should be encouraged, experts warn that homebuyers should not follow blindly.
Under FirstBuy, the Government and housebuilders such as Persimmon, Bovis Homes and Barratt Developments will join forces to offer new homeowners a loan of up to 20 per cent of the property price, so that they need only a 5 per cent deposit to qualify for a 75 per cent mortgage. Several lenders including Barclays, Halifax and Nationwide have already agreed to offer FirstBuy mortgages. However, this scheme is expected to help only about 10,000 people.
