30 November, 2011
The mortgage indemnity guarantee scheme for first time buyers announced today by the Government will encourage lending and is being welcomed as a positive step for the housing market by a Residential Conveyancing Expert at Forbes Solicitors.
The Government will underwrite mortgages for up to 100,000 buyers trying to get on the property ladder, meaning they will only need to pay a 5 per cent deposit for newly-built homes. Raising a deposit to buy their first home is the biggest hurdle many first time buyers face with The Council for Mortgage Lenders estimating the average first time buyer needs to find a £26,000 deposit.
Michelle Thompson, Head of Conveyancing comments, "I welcome this initiative; it will encourage lenders to lend which in turn can only be a positive step for the housing market. At the moment lenders are reluctant to deal with higher risk first time buyers and this will take that risk away as any losses will be met by the Government. This will mean more first time buyers will find themselves in a position to buy their first home with a smaller deposit and more favourable mortgage rates."