As the government in the UK helps home buyers

The monthly amount of payments on mortgage lending for property buyers in the UK who will be able to use the scheme “Help to buy”, will be much less than the cost of renting an equivalent property.

The UK Chancellor George Osborne has launched a new program “Help to buy” , under which the upper limit of interest-free government loan to property buyers in London will be raised from 20% to 40%. This means that those residents of London who have just a 5% Deposit, will be able to obtain from the government an interest-free loan of up to 40% of the value of the property and they will need to just take only 55% of mortgage loan from a Bank.

Another scheme helping buyers – shared ownership. It is a form of possession when the buyer becomes the owner only of the property, and for the rest he pays rent for it always remains the pre-emptive right to buy the remaining part. In order to become a member of this scheme, it is necessary to have an income of less than £80,000 per year outside London, and an income of less than £90,000 pounds in London. Additional benefits will be given to the retired soldiers. The scheme will apply to the purchase of real estate throughout England. Redeemed the share can range from 25% to 75% , and the rent for such owners may not exceed 3% of the outstanding amount to be paid. So, if you buy a house in England cost £227000 pounds , your rent for the remaining 60% ownership can not be more than 3% in this case, it’s £4086 in the year, or about £340 per month.

The UK government has shown a willingness to implement a lot of ideas and do everything to solve the problems of buyers in England, for the first time buying a house. The increase in the share of interest-free loan is a great way to lift the mood of consumers and create an additional incentive for the transaction. However, in addition, need to work together with mortgage lenders significantly tightened their conditions for granting loans. Meanwhile, it is necessary not to forget about other sectors of the market and the main problems of the UK property market – lack of supply to the market of new housing.

® Maxim Savitsky 01.12.2015

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