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New Government grant for Homebuy purchasers

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by Gill Montia

The department of Communities and Local Government has announced new measures that will support key workers such as nurses and teachers, and some other first-time buyers, in buying a property.

Cash grants of £1,500 are to be made available to those who take up a shared equity loan under the Government’s Open Market Homebuy scheme (OMHB).

The loans are aimed at helping cover the fees and other costs associated with setting up house.

Initially around 2,000 people will benefit from the £3 million allocated for the grants.

From the beginning of this month, buyers using OMHB have been able to take out a mortgage for up to half the cost of their property at an initial interest rate of 1.75%.

The loan, which is part-funded by Government, is combined with a conventional mortgage from a bank or building society.

In practical terms, this means that someone buying a house with a market value of £300,000 can take out a standard mortgage for just £150,000.

The Government will also shortly be confirming the locations of surplus public sector land, which it intends to use for developments that will provide 30,000 new homes across England.

Finally, ministers will be meeting with the Council of Mortgage Lenders and other industry representatives next week to examine ways in which lenders can support borrowers who are finding it difficult to keep up with mortgage repayments.

All parties will be examining the extent to which mortgage providers are treating customers fairly, under Financial Services Authority regulations.

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News posted: April 8, 2008

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