Logo

New Help to Buy Equity loan for London announced

PUBLISHED: 15:57 25 November 2015

Chancellor of the Exchequer George Osborne leaves the Treasury in London for the House of Commons, where he will deliver his joint Autumn Statement and Spending Review

Chancellor of the Exchequer George Osborne leaves the Treasury in London for the House of Commons, where he will deliver his joint Autumn Statement and Spending Review

PA Wire/Press Association Images

The government will double the equity loan it gives new buyers of new build properties within Greater London to 40 per cent.

In the Autumn Spending Review, George Osborne said that to reflect the current property market in the capital, from early 2016 the government will increase the upper limit in gives new buyers.

To benefit from the Help to Buy equity loan at the moment buyers must have a five per cent deposit. The government will then lend up to 20 per cent of the remaining value of the property. Buyers must then secure a mortgage of up to 75 per cent of the value.

With the new London Help to Buy equity loan buyers will still need to contribute at least a five per cent deposit.

– the government will give a loan for up to 40 per cent of the price

– buyers will need a mortgage of up to 55 per cent to cover the rest

The loan will be available on new build homes in London with a purchase price up to £600,000.

These changes will be funded by an increase of three per cent on the Stamp Duty paid on buy to let and second home purchases.

Housing Association tenants will be able to buy their homes through the new Right to Buy scheme. A pilot of the scheme involving five Housing Associations will be tested in the next few months, before it is rolled out across the board.

------------------------------------------------

How the numbers work

For a property costing £500,000 (just below the average London property price of £531,000)

5 per cent deposit: £25,000 (£15,000 of which could come from the Help to Buy ISA)

40 per cent government loan: £200,000

55 per cent mortgage: £275,000

Minimum income requirement for £275,000 mortgage: £61,000

If you value what this gives you, please consider supporting our work. Click the link in the yellow box below for details.

Become a supporter

This newspaper has been a central part of community life for many years, through good times and bad. Coronavirus is one of the greatest challenges our community has ever faced, but if we all play our part we will defeat it. We're here to serve as your advocate and trusted source of local information.

In these testing times, your support is more important than ever. Thank you.

Most Read

Most Read

Latest from the Hampstead Highgate Express