Government offers “free” loans to first-time buyers

The Government is today unveiling a number of measures to help kick-start the UK housing market by offering relief to homeowners in financial difficulties and first-time buyers.

Households in England earning less than £60,000 per annum will be helped into home ownership with a loan of up to 30% of a property’s value.

The loan will be offered free of charge for five years, on new properties only.

When the five-year offer period expires, homebuyers will be liable for a fee that will be paid to the Department for Communities and Local Government (DCLG).

The new scheme, called HomeBuy Direct, will be funded by property developers and government.

According to the DCLG, HomeBuy Direct will assist both first-time buyers and the housebuilding industry as the economy passes through a difficult period.

Homeowners in danger of repossession will be afforded some protection because councils and social housing landlords are being empowered to pay off lenders and rent properties back to their previous owners.

Those struggling with mortgage repayments will also have the option of selling a portion of their property or reducing their mortgage payments by applying for a special loan.

Finally, funding from existing budgets for social housing will be brought forward.

No figure has been announced but the amount is thought to be less than £1 billion.

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