T HE housing sector was hailed as one of the big winners in last week's Budget, with the Government announcing support for buyers right across the board.
Centrepiece of George Osborne's latest strategy to breathe life into the property market is the new Help to Buy scheme. It comprises two elements. The first is a new shared-equity scheme, starting next month, designed to help people buy new-build homes up to a price ceiling of £600,000. It means that someone with a five per cent deposit will be eligible for a Government loan of a further 20 per cent – effectively making it possible to buy a new home with a 75 per cent mortgage. The loans can be paid off at any time, and will be interest- free for the first five years.
The second and potentially far more important element is a new £130-billion mortgage indemnity scheme, under which the Government will in effect stand as guarantor for people taking out up to 95 per cent mortgages to buy any property, old or new – again up to a ceiling of £600,000.
Unlike previous schemes, which have tended to focus exclusively on providing help to first-time buyers, the aim is to stimulate the whole housing market – for example, helping so-called "second-steppers" who want to move up to the next rung on the property ladder.