FINANCE
A new key to open the door EXPERT COMMENT Ensuring people can buy a new build home is key to the industry’s ability to deliver the Government’s housing ambitions. Too many people are unable to realise their ambition of homeownership because they simply can’t afford the deposit required. The industry
Deposit Unlock is a new way to get a foot on the ladder with a small deposit. Kay Hill finds out the details of the scheme and how it compares with other options
has worked hard to develop a sustainable solution that will help more prospective buyers on to the housing ladder, maintain demand and so enable builders to deliver more desperately needed homes. Help to Buy has played a significant
With saving for a deposit representing the biggest barrier to homeownership, most schemes to help people buy a home aim to make it easier to buy with a smaller savings pot, such as Help to Buy: Equity Loan. This Government scheme allows first time buyers to borrow 20% (or 40% in London) interest-free for five years, enabling them to buy a new home with just a 5% deposit. However, it is only for first time buyers, and is set to end next year. A new scheme, Deposit Unlock, has recently been launched, which broadens the pool of people who can benefit and doesn’t have an end date. Unlike Help to Buy, which is Government-run, Deposit Unlock was set up by the Federation of Home Builders and reinsurance company Gallagher Re and is supported by housebuilders.
WHO CAN USE IT? The Government’s Help to Buy scheme insists that all participants must be genuine first time buyers who have never owned a property or land, or a share in a property, in the UK or elsewhere. And if you’re married, civil partnered or co-habiting and only one
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is a first time buyer, you can’t apply in a sole name to take advantage of the scheme. The policy excludes large numbers of buyers – not just second-steppers who may need help to buy a larger property, but first time buyers with a partner who has a share in a property from an earlier relationship, siblings who might have jointly inherited a property or groups of friends where one might have a share in a family holiday home abroad. Deposit Unlock has no such restriction and is available for both first time buyers and home movers, although mortgage companies have some restrictions on lending.
role in supporting increases in housing supply in recent years and has turned homeownership dreams into reality for hundreds of thousands of households. However, with the new Help to Buy scheme now less accessible in some regional markets, including many parts of northern England, and with the programme closing in 2023, a new option was required. This launch is testament to the foresight and investment made by 17 of our members. We are also grateful for the commitment shown by our two launch lender partners and look forward to welcoming others in
WHAT HOMES CAN YOU BUY? Unsurprisingly, given its creators, the scheme can only be used to buy brand new homes from participating developers – at the time of writing these included a number of big names such as Barratt, Bellway, Bloor, Countryside, Crest Nicholson, Hill, Persimmon, Redrow and Taylor Wimpey, with additional companies likely to join during the year. Each participating builder can choose which sites and individual
the coming months. Stewart Baseley, Executive Chairman, Home Builders Federation
First Time Buyer February/March 2022
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