Latest news with #homeOwnership
The Sun
12 hours ago
- Business
- The Sun
Mortgage scheme helping first-time buyers with small deposits to end in WEEKS – five other ways to get on the ladder
A MORTGAGE scheme that is helping first-time buyers get on the ladder is set to end within weeks. The mortgage guarantee scheme enables buyers to get a home with just a 5% deposit. It can be used to buy any type of home as long as you don't pay more than £600,000 for it. The scheme provides a guarantee that the Government will cover some of a lender's losses if a borrower can't afford to repay their mortgage and the home is repossessed. It's been available for buyers since April 2021 but it's scheduled to end on June 30, and there is no word yet on if or when a replacement will be launched. The Government said in February it would launch a "new, permanent, comprehensive mortgage guarantee scheme" that would "open the door to home ownership for more young families and hard-working renters". Brokers say it's possible the scheme won't be replaced - but don't be too disappointed just yet. Between the scheme's launch and the end of December last year, more than 53,000 mortgages were completed using it. Data released last week shows the total value of mortgages supported by the scheme was £10.7billion. But not every lender offering 95% mortgages has used the scheme, and many are still offering small or no deposit mortgages outside of the scheme. Justin Moy, managing director at EHF Mortgages, said the scheme may not be replaced because of renewed confidence in the mortgage market. The Sun's James Flanders explains how to find the best deal on your mortgage "This was originally designed to help lenders stretch to 90-95% Loan to Value at a time when confidence within the market was low, so this looks to be a positive step without causing too many ripples with lenders," he said. Pete Mugleston, mortgage adviser and managing director at Online Mortgage Advisor, said losing the scheme would be "mixed news" for first-time buyers. "On the one hand, the mortgage guarantee scheme was a useful way of helping first-time buyers get on the property ladder if they didn't have a large deposit," he said. "But, given that a lot of lenders are now offering mortgages with a 5% deposit and lower, losing it isn't as big an issue as it could have been. "As the government has not given any further details about the scheme it promised in February, we could be waiting a while before we hear anything." The Sun contacted the Treasury for comment. What other schemes are available? Even if the mortgage guarantee scheme is replaced, there are other Government schemes available for first-time buyers. You should look into each option thoroughly before going ahead with it and consider any disadvantages to the schemes. These are some of the options available... First Homes First-time buyers can get a home for between 30 to 50% less than its market value through the First Homes scheme. You can buy a new build home from a developer or a property from someone who's used the scheme before and is now selling. The scheme is only available in England and you'll have to be 18 or older to qualify. Your total household income must be £80,000 or less, or £90,000 in London. You'll also need to be able to get a mortgage for at least half the price of the home. Shared ownership If you can't afford all of the deposit and mortgage payments for a home that meets your needs, you could consider shared ownership. This is when you buy a share of the property and pay rent to a landlord on the rest. You'll also likely need to pay a service charge to maintain common areas shared between you and your neighbours. Buyers can usually get a share of between 10 and 75% of the home's full value. You can buy more of the home later on in a process called staircasing. However, some people who have used shared ownership have struggled to buy bigger portions of their homes due to being forced to pay increasing rents and service charges. Lifetime ISA People struggling to save for a deposit can get extra help from the Government by saving into a Lifetime ISA (LISA). You can save up to £4,000 a year into it and the Government will give you a free bonus worth 25% of whatever you save. You have to be between 18 and 39 to open a LISA and you can pay in and get the bonus until you're 50. It's worth knowing that if you withdraw your money before you're 60, it must be spent on buying your first home. If you withdraw it for any other reason you'll lose your bonus and also effectively pay a 6.25% penalty - so you'll end up with less than you put in. You should also be aware that you can only use a LISA on homes worth up to £450,000. Right to Buy This scheme was brought in during the 1980s and allows most council tenants the right to buy their council house at a discount. There are different rules for Wales, Scotland and Northern Ireland. You can make a joint application with up to three family members who have lived with you for the past 12 months. If you rent from a Housing Association you may also have the right to buy it at a discount under the Government's Right to Acquire Scheme. Deposit Unlock This lets you buy a new build home from any developer registered with the scheme as long as you have a 5% deposit. The scheme is available to both first-time buyers and home movers. It's available on new-build homes up to the price of £833,250. Deposit Unlock is currently available with participating lenders including Nationwide, Accord Mortgages and Newcastle Building Society. What do lenders offer? As well as Government schemes, some mortgage lenders have also been offering incentives for first-time buyers. For example, Skipton Building Society offers a 100% mortgage deal that allows you to buy a home without a deposit. A similar mortgage deal was recently launched by April Mortgages too. Accord offers a £5,000 deposit mortgage while other lenders have been slashing their affordability rules. Why you should be cautious with 100% deposit mortgages These types of mortgages can open doors for people who wouldn't be able to get on the housing ladder otherwise. Experts have generally seen the reintroduction of 100% mortgages as a positive thing and this deal from April Mortgages does have rigid lending criteria. But it's important to remember this deal won't be for everyone and they can be seen as quite controversial home loans. 100% mortgages mean you don't need a deposit - but it also puts buyers at higher risk of negative equity. This is when your mortgage is more than the total value of your home, which can happen if house prices fall. If you're in this position it can make it harder to remortgage, sell your home and get competitive rates from lenders. Typically they also have higher interest rates, making them more expensive. The general rule is that the smaller your deposit the higher your monthly mortgage repayments will be. Therefore because you won't have a deposit, your monthly repayments are likely to be more expensive compared with someone who did put down a deposit. You will need to be sure you can keep up with the payments and account for any potential financial shocks. 100% mortgages disappeared after the financial crisis in 2008, as they were seen a contributor to the sub-prime housing bubble and subsequent collapse.
News.com.au
2 days ago
- Business
- News.com.au
‘No Boomers' Shares app now helping young Aussies crack the housing market'
A share trading app which famously had a blunt message for those born before 1970 is trying to get more Aussies into their own home through an unused government scheme. Pearler, a share trading app moving into the superannuation space, has launched a product they are calling 'HomeSoon' with the aim of simplifying the steps needed to take advantage of the government's first home savers scheme (FHSS). The company says it is also the first platform in Australia to allow customers to use open banking to track bank savings, FHSS savings, shares, and other assets in one place – regardless of whether those assets are held with Pearler. Pearler co-founder Nick Nicolaides said house price growth is outpacing savings, meaning it is no longer sustainable for the average person to park their money in a bank account while they are saving for a deposit. 'Bank savings are no longer sustainable for a seven-eight year journey, and with that it adds complexity,' Mr Nicolaides told NewsWire. 'I don't think people really have a choice but to have their house deposit spread across bank accounts, probably some shares and the FHSS. 'It is more of a case of getting to the end goal of being wealthy enough to buy into the housing market, you now need to not only understand savings and budgeting, you now need to understand investing and this scheme,' he said. Mr Nicolaides said ideation was simple – to help first home buyers get into the housing market by taking the complexity out of a current scheme. 'We've been talking to customers for a while with only a fraction of customers actually using the scheme,' he said. 'When we asked why, it was very clear that firstly the scheme was in super which people feel some nervousness about and if you then get your head around putting additional savings into super, tracking, knowing what you can withdraw and withdrawing it in time, it quickly layers up. 'So a combination of a complex superannuation system and a not very mainstream scheme really puts most people off.' The latest PropTrack Home Price Index shows it has never been more expensive for first home buyers to get into the market. National house prices hit a new peak in May, lifting by 0.39 per cent over the month for a 4.12 per cent year-on-year gain. All capital cities saw home prices grow in May, with Melbourne leading the way up 0.79 per cent, followed by Adelaide up 0.52 per cent and then Sydney up 0.39 per cent. Nationally, since the Covid falls starting in March 2020, house prices are up 50.1 per cent for a new median house price value of $809,000, while Australia's most expensive city, Sydney, will set the median buyer back $1,124,000. Pearler's latest superannuation move follows launching a fund in late March saying it caters for younger members with a simple slogan 'for people born after 1970 (sorry, Boomers)'. During the launch, Mr Nicolaides said the 'no Boomers' fund was more about solving a problem for younger Australians than a display of anti-Boomer rhetoric. 'If you take a casual interest in what is written about superannuation, most articles are written about how the superannuation industry can deal with retirement,' he said. 'It makes sense that it gets the most attention because it is an immediate problem now. 'But at the other end of the spectrum, the industry and the media recognise that engagement in super is lacking in younger people. If we don't fix that, then today's younger people will find themselves in the same boat in 20, 30 years time,' Mr Nicolaides said. The FHSS allows people to contribute and access up to $15,000 of their voluntary contributions into super each financial year (up to a total cap of $50,000) for a home deposit. The main benefit of saving for a home this way is super's lower tax rate – meaning Australians can potentially get to their deposit faster. The scheme currently has a relatively low take up, with Pearler saying just 13.7 per cent of home buyers bought through the FHSS. Mr Nicolaides said the onus was not on the government to market the product better but instead on the general financial advice sector to do a better job of educating people. 'The government got the ball rolling on a fantastic scheme but there is only so much that can be done,' Mr Nicolaides said. 'We have a situation in Australia where, whether generationally like it or not, most of our financial decisions are going to be self-directed for the average person on the average wage. 'It becomes our job as an industry to educate people by giving them the tools and the guidance in mediums people want to use.' Mr Nicolaides says he hopes over time three in four Australians trying to buy a house will do so through the FHSS.
Free Malaysia Today
5 days ago
- Business
- Free Malaysia Today
Decade-long wait ends for buyers in abandoned Johor house project
Johor menteri besar Onn Hafiz Ghazi handing over the ownership certificate to house buyers of the abandoned housing project in Johor Bahru today. (Facebook pic) PETALING JAYA : After more than a decade of waiting, buyers of the abandoned housing project in Taman Permata Layang, Simpang Renggam, Johor, have finally received their certificate for home ownership. Johor menteri besar Onn Hafiz Ghazi said this project was close to his heart as it was within his own constituency of Simpang Renggam. 'I have been championing it since I first became an elected representative. 'Resolving the issue was no easy task – it required on-the-ground efforts, careful planning and close collaboration between various agencies,' he shared in a Facebook post today, Bernama reported. Onn Hafiz today handed over the home ownership certificates to the buyers of the 47 units of affordable homes, each priced from RM42,000. He hoped this achievement could serve as a stepping stone towards resolving other abandoned housing projects in Johor.
The Independent
21-05-2025
- Business
- The Independent
Some first-time buyers accessing bumper Lifetime Isa deposits of £50,000-plus
Some first-time buyers had more than £50,000 to put towards the cost of their property in 2022-23 after saving into Lifetime Isas, according to HM Revenue and Customs (HMRC) figures. Lifetime Isas, or Lisas, were launched to help people get a foot on the housing ladder or help them save for later life. A freedom of information (FOI) request made to HMRC by money app Plum found that the top 25 Lisa withdrawals made to buy a home in the financial year 2022-23 averaged £51,000. People can save up to £4,000 per year into an Isa up to the age of 50 and the Government will add a 25% bonus to savings, up to £1,000 per year. Savers making withdrawals for any other reason than buying their first home or saving for later life face a withdrawal charge of 25%. If someone is using a Lisa for their first home, the property must cost £450,000 or less. HMRC's figures only included 'authorised' withdrawals – those who were eligible for the Government bonus. More than 42,800 Lisa withdrawals to buy a home in 2022-23 were for at least £10,000, and among them more than 11,200 pots contained £20,000 or more. Rajan Lakhani of Plum, which is offering a 4.75% Lisa rate, said: 'Against a backdrop of recent global volatility it's reassuring to know the Lifetime Isa can deliver stunning gains, regardless of the broader economic outlook. 'And don't forget that this Government boost comes in addition to any interest you earn on savings.' As part of its Lisa launch, Plum has created a digital tool to give savers an indication of how long it could take them to build the deposit necessary for a starter home in their desired postcode.
