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Brown to give £1bn to first-time buyers
Brown to give £1bn to first-time buyers
26th May 2005
THE government is expected to announce a £1bn mortgage subsidy scheme that will aim to help first-time buyers on the property ladder.
The so-called shared equity plan will allow first-time buyers to find 75 per cent of a property’s value, with the rest being underwritten by lenders and the government.
Details of the scheme, which will be announced by chancellor Gordon Brown this week, are expected to be announced later this year.
The news follows a rise in the number of people choosing intermediaries to arrange their mortgages, according to Mortgages plc and Mortgage Promotions.
The monthly research produced by the two companies shows the number of IFAs seeing an increase in client activity by 3 percentage points in April to 56 per cent.
Nick Baxter, director of Mortgage Promotions, said: “Intermediaries need to be marketing efficiently to their existing and potential clients to maximise any upturn.”
However, the Royal Institution of Chartered Surveyors found that housing market activity in April fell 30 per cent from April 2004. Indicators such as buyer enquiries and newly agreed sales remain flat for the second month in succession.
Financial services provider Mortgages Direct found borrowers were opting for fixed-rate mortgages following uncertainty over interest rates.
However, lenders are confident interest rates will drop in the near future
and the average rates for two-year and five-year fixed-rate mortgages have
decreased from last year.
The study found that fixed-rate lending has increased by 54 percentage points
since April 2004, with two-year fixed-rate deals the most popular. Variable-rate
mortgages with three to five-year discounts had fallen 20 per cent since April
2004.
Peter Gladdy, director of Mortgages Direct, said: “The increasing popularity of short-term fixed-rate lending indicates that borrowers are nervous.”
In the buy-to-let market, the National Landlords Association said that its latest poll showed landlords were not motivated by capital gain on the value of their properties.
David Salusbury, chairman of the NLA, said: “What matters to landlords is finding good tenants who will look after their properties and stay for a reasonable period.”
Halifax’s latest property survey showed that the
percentage of homes that were not affordable for key public sector workers has
increased from 55 per cent to 93 per cent for nurses and from 34 per cent to 77
per cent for teachers in the last three years.
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