From The Independent · · 2m
First-time buyers: what deposit you need by region
The government's Your First Home scheme aims to help first-time buyers with 2.5 per cent deposits backed by equity loans. Here's what you'd need to save across England.
In brief
The government's Your First Home scheme aims to help first-time buyers with 2.5 per cent deposits backed by equity loans. Here's what you'd need to save across England. The government's Your First Home scheme will let first-time buyers purchase new-build homes with two point five percent deposits backed by twenty…
New scheme targets deposit barrier
The government's Your First Home scheme aims to help first-time buyers in England overcome the deposit barrier. Details will be set out at the Budget on twenty-eighth October.
How the scheme works
The plan supports two point five percent deposits, helped by twenty percent government-backed equity loans, for prospective first-time buyers purchasing new-build property from a developer signed up to the project.
Why this matters for buyers
Nathan Emerson, chief executive of Propertymark, says the scheme has potential to make a meaningful difference to aspiring first-time buyers who are financially ready for a mortgage but unable to overcome upfront costs.
“This has the potential to make a meaningful difference to a very large number of aspiring first-time buyers, particularly those who are financially ready to take on a mortgage but have been unable to overcome the upfront costs”
Average deposit across England
The average new-build home in England currently costs three hundred eighty-six thousand nine hundred pounds. A two point five percent deposit would be nine thousand six hundred seventy-three pounds.
Total upfront cost is higher
Once estimated first-time buyer stamp duty and conveyancing fees are included, the total amount required upfront rises to fifteen thousand nine hundred fifty-two pounds, not just the deposit alone.
Regional variation is stark
Hamptons found the cheapest deposit would be in Liverpool at three thousand nine hundred fifty pounds, while the largest would be in Kensington and Chelsea at twenty-seven thousand three hundred twenty pounds.
Monthly repayments and equity loan
Based on current mortgage rates, the typical monthly mortgage payment would be around one thousand four hundred ninety-eight pounds, assuming a two point five percent deposit and a twenty percent government equity loan.
Housebuilders face key questions
Anthony Codling at RBC Capital Markets says the scheme could be a lifeline for the government's housebuilding aspirations, but key details remain unclear about house price caps, salary caps, and interest rates after any interest-free…
“Your First Home could be a lifeline for the Government's housebuilding aspirations”
Scheme could boost struggling sector
The building sector has faced a tough year as rising mortgage rates reduced buyer demand and rising oil prices increased build costs.
What it means
The government's Your First Home scheme will let first-time buyers purchase new-build homes with two point five percent deposits backed by twenty percent equity loans, with details due at the Budget on October twenty-eighth.
