£100million extra for struggling first-time buyers

17 December 2008 / by Rachel Mason
The Government has promised struggling first-time buyers an extra £100 million on top of the £300million already pledged as part of its plans to help more people get on the property ladder.

The HomeBuy Direct scheme, which was first announced in September, offers 'interest free loans' to first-time buyers to help them buy homes which developers are struggling to sell.

Originally, the Government announced that £300million of tax payers' money would be made available for the scheme, which would see homes that remain unsold bought up and then sold onto first time buyers struggling to get onto the property ladder.

Now, Housing Minister Margaret Beckett has said that the scheme will see a further £100million of funding, bringing the total to £400million.

First time buyers will be offered an interest-free mortgage to cover a deposit worth up to 30 per cent of the cost of the new home.

More than 130 developers have already agreed to offer the HomeBuy Direct scheme which will help around 18,000 middle and low income buyers purchase a home at sites across England. The loan - free of charge for five years - will mean first time buyers will be able to buy a home worth £180,000 with a mortgage of just £126,000.

"For many young families who aspire to own a home, the difficulties in the housing market have made the step on to the property ladder that bit harder. This deal will give them more support and put their dream of becoming home owners within reach," said Mrs Beckett.

"At the same time, this scheme will also help developers to weather the tough times in the market, by protecting jobs and helping to keep business going."

Eligible first time buyers will be able to apply for the scheme from early 2009 through their region's HomeBuy agent.

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