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A £250 million scheme to help first-time buyers onto the property ladder was announced in the Budget 2011. Other measures include an extension of the temporary changes to the Support for Mortgage Interest scheme and reform of the planning system.
A £250 million scheme to help first-time buyers who want to buy a new-build property but can’t afford the high deposits has been launched.
Under the First Buy scheme, the government and the housebuilders will jointly provide a 20 per cent loan to top up first-time buyers’ own deposit of 5 per cent. This will allow them to take out a mortgage for 75 per cent of the property.
Loans will be free of charge for the first five years and repaid when the property is resold. The funds will then be recycled to fund more homes for the scheme.
The First Buy scheme should help 10,000 families to get onto the housing ladder for the first time, with the first homes expected to be available from September 2011.
The temporary changes to the Support for Mortgage Interest scheme (SMI) will be extended for another year.
The 13-week waiting period and £200,000 limit on eligible mortgage capital will now remain in force for new working age SMI claimants until January 2013.
This should reduce mortgage arrears for around 100,000 out-of-work homeowners.
In the June 2010 Budget, the government announced a package of reforms to Housing Benefit to be introduced from April 2011 onwards.
For details of these changes, which include limiting Housing Benefit for claimants who can be expected to look for work, follow the link below.
The planning system will be reformed to help encourage sustainable development.
Existing controls on greenbelt land will be maintained, but nationally imposed targets on the use of previously used land will be removed. A consultation will also be launched on making it easier to convert commercial premises to residential.
The sale of surplus military land and other public sites suitable for housing will be speeded up.
Auctions of planning permission on land will be trialled for the first time, starting with public sector land.
'Build now, pay later' techniques will also be trialled to quicken delivery of new houses. It is hoped these proposals will deliver 20,000 new homes by 2014-15.
The planning system will be speeded up, with a 12-month limit for the processing of all planning applications, including any appeals.
To strengthen demand for residential property, the stamp duty land tax rules on bulk purchases will be reformed.
This will reduce a barrier to investment in residential property, promoting private rented housing supply.
The outcome of the review of the stamp duty land tax relief for first time buyers will be announced in autumn 2011.
Real Estate Investment Trusts will also be made easier to set up and more accessible to investors. This will hopefully encourage investment in the private rented sector over the longer term.