Great news for financially stretched homebuyers in the South West
In the South West housing market conditions are improving gradually with prices trending slowly upwards, averaging just 0.2% over May. The number of new buyers increased by 4.2% and the South West saw a 15.6% increase in number of sales agreed in May.
These statistics mirror what Redrow has seen in the region, the growth has been boosted by the introduction of the government’s Help to Buy scheme. The award-winning housebuilder is having great success with the new initiative across the South West and now tops the table amongst the Redrow group, with the highest take up across the UK.
Although the initiative launched just 10 weeks ago, Help to Buy sales already account for 10% of Redrow South West’s total sales since 1st July 2012, demonstrating its huge popularity. Over the past two months up take of the scheme has been dramatic, with 43 plots in the South West reserved using Help to Buy.
Buyers looking to purchase a newly built home are now able to take out a mortgage for just 75% of the cost of the property and enjoy lower monthly mortgage repayments, provided they can provide a 5% deposit, thanks to investment in government loans.
Those who qualify are eligible for an equity loan worth up to 20% of the value of the property, which is interest-free for the first five years. This means homebuyers will be able to access much more competitive interest rates, making their mortgage repayments more affordable. Help to Buy, which launched in April, will run for three years and help up to 74,000 buyers.
It is hoped that this scheme will help stimulate the housing market and in turn the economy. The initiative is an evolution of an existing scheme called FirstBuy, which went live in 2011, but Help to Buy can benefit those looking to move up the housing ladder, as well as first-time buyers.
Furthermore, compared to FirstBuy, Help to Buy has fewer restrictions; the maximum property price considered is £600,000, the loan can be repaid at any time or when the purchaser comes to sell their home and there is no cap on the maximum someone can earn to be eligible.
Andrew Addison, sales director for Redrow (South West), said: “We’re obviously very happy with the sales success thanks to Help to Buy, however, we are not surprised the initiative is proving so popular. It dramatically improves the outlook for many who want to move to a new home but do not have the large deposit required by many lenders. The initiative also opens the door for those who have saved hard for a 5% deposit, while allowing them access to better interest rates usually reserved for people with much larger savings.
Whilst Redrow has found that around 60% of those using the initiative are first time buyers, next time movers with little or no equity are also finding it really useful.
Helping to improve people’s options, key lending partners Nationwide, Natwest and Halifax now on board with Help to Buy and there are many great offers available. For example, those who chose to get their mortgage with Halifax can enjoy free stamp duty. Natwest are offering competitive interest rates e.g. 75% two year fixed at 3.15%, £0 fee and 75% five year fixed at 3.59%, £0 fee.
Homebuyers keen to find out more about the initiative are encouraged to attend the Help to Buy Clinics which Redrow is holding next month, across the South West. Events will be taking place at Willowbrook in Devizes, The Fairways in Newton Abbot and The Heathfields in Monkton Heathfield.
For more information about Help to Buy, visit redrow.co.uk/helping-you-move/help-to-buy. To find out more about Redrow, visit redrow.co.uk.
