The British government’s new Help to Buy scheme will enable people to buy a home with a deposit of less than STG10,000 ($A17,000) in more than half of regions across country, a property website has found.
Aspiring home buyers will from this week be able to start applying for the second phase of the flagship initiative, which will offer state-backed mortgages to UK borrowers with deposits as low as five per cent.
The scheme, which has sparked fears of a new housing bubble, will give people a helping hand to buy a new or existing home worth up to STG600,000.
The launch means the average buyer will be able to get on the housing ladder with a deposit of less than STG10,000 in six out of 10 regions across England and Wales. These are the North East, the North West, Yorkshire and the Humber, the West Midlands, the East Midlands and Wales.
With the average asking price standing at STG222,168 across England and Wales in October, Zoopla found that the typical size of a five per cent deposit needed across the country would be STG11,108.
Recent studies suggest that Help to Buy will considerably ramp up the appetite for home buying in the coming months. One-third of people who are considering buying a home in the next year plan to turn to the scheme, according to a recent survey by Santander.
The initiative, which is set to run until January 2017, will see the state offer guarantees totalling around STG12 billion to unlock STG130 billion of high loan-to-value mortgage lending.
Phase two of Help to Buy will initially be available under the NatWest, RBS and Halifax brands. RBS/NatWest plans to help 25,500 buyers through the scheme over the next three years and it will extend its opening hours to meet customer demand.
Customers who get access to these mortgages will be able to draw down funds as soon as they are approved and will not have to wait until the original launch date of January.