Since the reopening of the property market in May, the housing industry has had an unexpected boom of enquiries, valuations, and successful moves. However, to a significant some, the COVID-19 pandemic has been a huge turn-off for some hopeful homeowners and first-time buyers, mainly due to financial problems and the worrying risk of spreading coronavirus.
That’s why, at the beginning of the month, Boris Johnson announced his plans to “turn Generation Rent into Generation Buy” by introducing a new 5% deposit mortgage scheme to boost the confidence of millions of optimistic home buyers and sellers.
While specific details haven’t yet been announced, Johnson explained he is pledging to rebuild the dream of homeownership for young adults and families. He has vowed to offer a fixed-rate mortgage to those with just 5% deposits to help get more 20 to 30-year-olds on the property ladder.
Johnson went on to say this will be the “biggest expansion of homeownership since the 1980s,” however, the government has cautiously kept their lips tight about how and when the scheme will be introduced. Sources have said that the scheme is likely to come into force in 2023 when the new version of Help to Buy comes to a close, essentially becoming Help to Buy 3.0.
What does this mean for First-time Buyers?
It’s safe to say purchasing a property is easily one of the biggest investments you will make in your lifetime. To so many of us owning a home is the lifetime dream, but we are all aware of the heavy price tag and bills it comes with.
It can especially be a scary and stressful time for first-time buyers. After all, they have never been through the process before, and saving for a 10% deposit has been considered to take many years and a lot of commitment.
First-time buyers who have moved or considered moving this year have been hit particularly hard by the pandemic. Previously, those struggling to raise savings used to be able to apply with a 5% deposit, which encouraged schemes like Help to Buy and Shared Ownerships to come into play. However, these have been disappearing from the market in recent months, causing worryingly difficult times for these first-timers.
Furlough is an additional factor that has caused complications for movers during and after lockdown, as millions have been cut 20% of their monthly salaries, therefore meaning they can no longer qualify for the best deals.
Mr Johnson added he’s “giving the chance of homeownership, and all the joy and the pride that goes with it, to millions who currently feel excluded.
“We believe that this policy could create two million more owner-occupiers, the biggest expansion of homeownership since the 1980s.”
As a result of this, we believe this new scheme will help ease the buying process for first-time buyers, as it reduces the deposit they have to save drastically. This will provide more incentive to save more and spend your additional savings on things like furniture and bills.
Our national lockdown has brought upon many hurdles for the property market to jump over, and luckily, the nation has responded amazingly. With this new 5% mortgage scheme coming into place in the next few years, do you think it will fix our national market?
Ease your mind and make that move with Peter Lane & Partners!
Our professional, friendly team is always keeping up-to-date with the latest property industry news. With this in mind, plus our exceptional knowledge of Cambridgeshire and property buying/selling, Peter Lane & Partners can help you make that move.