If you’re a young adult and a first time buyer, you’re in luck. According to recent research I came across from the Mortgage Advice Bureau, around two-thirds (65%) of young Britons plan to take advantage of the government’s Help to Buy scheme to purchase their first home. Some 38% of adults below 30 expect to buy their first home by 2016.
Another 27% plan to move house under the scheme, launched this month – three months earlier than planned. The Help to Buy scheme allows homeowners to apply for government-backed mortgages worth different percentages of a real estate’s value. In its second stage, the guaranteed loans will cover up to 95% of the property value and be available on all types of property, not just newly-built homes.
The scheme has had the most substantial impact on young people’s attitude towards property buying, which is in tandem with the government’s plan to back first-home buyers. According to the mortgage broker, the scheme has encouraged 30% of Brits aged 18-29 to buy a newly-built home against just 13% of all adults. Existing, or ‘second hand’, properties will be the choice of 20% of young people now that the scheme is in place, compared to 12% of all adults.
Owning a house is still a top priority for 79% of Britons, with 55% saying this is a “very important” goal to achieve in their lives. Just 1% of people aged 18-24 do not consider homeownership important, against 5% of all adults.
Consumers’ desire for better access to mortgages is obvious. The second stage of the scheme will bring existing properties into the game, alongside newly-built homes, the mortgage broker’s head of lending, Brian Murphy, commented. This means that government support will now be available to a greater number of people to help them bring their homeowning plans into reality, he said.
It seems that raising funds for a deposit is one of the biggest hurdles buyers face. This guarantee should help them get through this initial challenge. What are your thoughts on the Help to Buy scheme? Would it encourage you to jump on the property ladder?