Government makes attempt to attract buyers

Posted: 16 Dec 2008 12:27:06 GMT

Home loans for first-time buyers could be made more affordable once again as a result of government financial aid, it has been reported.

In an attempt to stimulate the rapidly stalling property market, government ministers have announced an offer in which a 15 per cent home loan will be made available for buyers with a household income of under £60,000.

This loan could be coupled with a further 15 per cent loan from a building developer, eliminating the need for a deposit on a new property.

The remaining cash needed from a traditional mortgage would amount to only 70 per cent of a homes value, meaning home ownership could once again become affordable for many.

The scheme, called HomeBuy Direct, may be the most popular government initiative so far, but with so many turning to the rental sector it is possible that home ownership simply doesn't carry the attraction it once did.

Sir Bob Kerslake, chief executive of the Homes and Communities Agency, formerly the Housing Corporation, said in a Guardian report: "There has been a tremendous response from developers to this scheme and we believe there is demand from purchasers who want to get on the property ladder."

Negative equity and a lack of flexibility mean that many are now tempted to invest not in the property market but the rental sector.

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