Help for first-time buyers

Leading housebuilder Barratt has been awarded funding to provide more than 300 new homes around the country exclusively to first-time buyers.

The funding is part of a new First Time Buyers’ Initiative (FTBI) designed to help people get onto the property ladder. FTBI enables aspiring first-time buyers, who cannot otherwise afford to buy a home outright, to purchase a minimum of 50% of a new home with Government agency English Partnerships providing the remainder of the funding.

Barratt is one of three builders selected in the first round of the initiative with over 300 homes on nine developments located in Brighton, Bristol, Ely, Gravesend, Leeds, Liverpool, Romford, Southampton and Watford.

FTBI is part of the Government’s new ‘HomeBuy’ low cost ownership initiative being introduced across the country.

Under the new scheme, which is a form of equity mortgage rather than shared ownership, people are able to purchase a home without requiring large amounts of capital and with mortgage repayments they can afford. Applicants need to have £1,000 to cover the reservation fee, as well as savings of £4,000; although this sum can be gifted by relatives.

Applicants who meet the criteria will be able to select their new home, pay a deposit and arrange the ‘maximum affordable’ mortgage for at least 50% of the property’s cost through a participating bank or building society. English Partnerships will then contribute the remainder of the funds.

For the first three years, buyers will be responsible for their mortgage repayments but will have nothing to pay to English Partnerships. At the end of the fourth year, the buyers will pay an annual charge of 1% of the funds provided by English Partnerships, 2% becomes payable at the end of the fifth year and a maximum of 3% is payable at the end of the sixth, and each subsequent year.

At intervals, buyers will be able to purchase an additional share of the equity in their new homes from English Partnerships at the prevailing market value; a minimum 10% share can be purchased at any one time.

Apartments bought under this scheme can be sold on the open market and the proceeds of the sale will be split with English Partnerships pro rata to their share.

The scheme follows the successful completion of four pilot first-time buyer sites awarded funding by English Partnerships last year. Melanie Latham, who bought one of the pilot homes at a Barratt development in Feltham, West London, said: “My apartment is fantastic. It’s spacious, has two bedrooms, there’s an en-suite shower room, and all the appliances have been fitted in the kitchen so I didn’t need to buy anything else.”

Mark Clare, Barratt Group Chief Executive, said: “This initiative adds to the supply of affordable homes, increasing levels of home ownership and creating mixed communities. It is an excellent means of helping first-time buyers towards full home ownership.”

Duncan Innes, the English Partnerships Director responsible for FTBI, said: “These new affordable homes will provide a real opportunity for first-time buyers in many communities across England, where they are needed most. We want to help as many people as possible to take their first steps towards full home ownership, and we want to be able to do that quickly. The First Time Buyers’ Initiative will help us to do that.”

Barratt are currently building on over 450 developments around Britain, at prices from around £90,000 to over £2 million. For further information, go to barratthomes.co.uk.