How first-time buyers can get on to the property ladder at fraction of the cost
29.02.2024 - 06:59
/ manchestereveningnews.co.uk
Stepping on the property ladder tends to be much more difficult for first-time buyers today. Not only are house prices generally much higher than they were a few years ago, but mortgages are also less affordable due to higher interest rates.
New-build homes are an increasingly popular option for first-time homeowners across the UK. As well as the houses themselves coming with many benefits such as better energy efficiency and 10-year warranties, there are some helpful schemes available that make buying a brand new home much more appealing.
These schemes are specifically designed to help first-time buyers onto the property ladder, with smaller deposits and discounts on the purchase price. The three main schemes available for new-build homes are Deposit Unlock, Shared Ownership and First Homes.
READ MORE: Three-bed house in attractive village priced at £110,000 - but it comes with a warning
Here we look at what each financial support scheme means, with some expert advice from Zoopla.
Deposit Unlock is a relatively new scheme that was launched by the house-building industry to enable first-time buyers to buy a new-build home with just a 5 percent deposit and a 95 percent mortgage.
When you buy your home, the developer pays a percentage of the purchase price into an insurance policy for your mortgage provider. That insurance policy in turn reduces the risk of lending for your mortgage provider, as it will cover any potential losses for them if you were to default on your mortgage.
The insurance also enables you to benefit from a lower interest rate than you would normally get if you were borrowing 95% of your property’s value.
The scheme is available on any qualifying house or 2+ bedroom apartment. There are currently