The NEW Generation Buy Scheme - Everything you need to know
Prime Minister Boris Johnson announced yesterday afternoon that he would make the dream of buying a first home a more achievable reality for first-time buyers.
What is Generation Buy?
Generation Buy is a Conservative scheme Mr Boris Johnson hopes will encourage people to buy homes and rejuvenate the property market.
His scheme would allow first-time buyers to obtain a mortgage with just a five percent deposit.
The Prime Minister added the transfer to a "long-term, fixed-rate" mortgage would allow young adults to get their foot on the ladder and "fix our broken property market". The news came in a speech at the virtual Conservative conference.
The PM claimed his Government would introduce fixed-rate long term mortgages which would see as many as 2 million first time buyers being able to borrow 95% of the value of the property they want to buy.
What does this mean?
The move is intended to help younger buyers afford a home of their own as large deposits of up to 10-15 % are often the stumbling block to their home-owning ambitions.
Addressing the issue of a generation of young people who feel as though homeownership may have passed them by, he said: “For most people, it is still true the overwhelming instinct is to buy.
“But many of them simply can’t, not because they can’t afford the mortgage but because they can’t pull together the deposit.“
The truth is homeownership levels in this country have plummeted, and many are forced to pay to rent a home they can not truly love or make their own.
“This policy will create two million more owner-occupiers – the biggest expansion since the 1980s of homeownership, to every part of the country.”
“We need mortgages that will help people really get on the housing ladder even if they have only a very small amount to pay by way of deposit, the 95 per cent mortgages."
The Help to Buy scheme ends in March 2023 after receiving a series of extensions, and there has been much talk about what type of scheme – if any – could replace it.
The current property market
The property market was one of the first financial fatalities of COVID-19 and has struggled to recuperate since restrictions lifted.
The long time backbone of the British economy saw home values crash earlier this year, and they have slowly recovered!
UK house prices saw the most significant boost since 2016 last month, as they rose by five percent.
We await more details on the announcement, but at first glance, it looks like good news, not just for young buyers but for the whole property market if this plan is put into action.
If you are a first-time buyer who wants to be kept updated with suitable new properties as they come onto the market, please contact us.
We think this could be absolutely revolutionary, particularly for young people.
We can also answer any questions you have about the home buying process.
Thanks for reading.
Take care,
The Alexanders Team.