SPF Private Clients is already seeing strong demand for the London Help to Buy (HTB) scheme.
The mortgage broker said the government scheme, which was launched last week, is seen by some as the “saviour of the London first-time buyer”.
Russell Hall, Head of New Homes at SPF, said: “Demand is expected to be high and we have already had a deluge of provisional enquires from applicants wanting to know whether they qualify and how the scheme will work.”
“The 40% government equity loan has raised eyebrows and will help purchasers meet the tough affordability tests.
“That said, the fear of not being able to afford the overall borrowing when the equity loan needs to be repaid is nullified by the lender accounting for this in the affordability calculations.”
SPF, which set up a new homes division at the tail end of last year to cope with the more specialist nature of this market, said more new build schemes is a positive for developers.
“The only initial reservation about the scheme is HTB London cannot be offered on new-build schemes more than nine months from completion, so this may restrict a purchaser’s choice when it comes to buying off plan,” added Russell.
“The reaction from the lending market has been positive with 10 lenders already accepting applications; these being the usual suspects including Halifax, Nationwide and NatWest.
“It appears that Barclays has pulled the first punch with a competitive 2-year fixed rate at 1.55% yet all the rates so far appear attractive.”
Leave a comment