Scheme gives first-time buyers helping hand onto ladder
Although house prices in Northern Ireland are 50% lower than they were at the height of the boom in 2007, many people are still struggling to get on the property ladder – but help may be at hand.
A combination of stagnant wages, increases in the cost of living and higher deposits have made things more difficult for first-time buyers.
Now the government's new UK-wide Help to Buy scheme, which was launched this month, offers state-backed mortgages to people with deposits as low as 5%.
The aim is to help people who cannot afford the large deposits – often as much as 25% of the purchase price of a home – which banks and building societies have asked from would-be buyers since the crash promoted them to hold onto their cash.
The government offers a guarantee of 15% of the loan to the lender to encourage the bank or building society to offer the loan.
Ulster Bank parent Royal Bank of Scotland (RBS), NatWest, Halifax and Bank of Scotland started offering loans under the initiative last week and have reported strong interest so far, while more lenders – including HSBC, Barclays and Santander – have also confirmed their plans to come on board.
The availability of the scheme in Northern Ireland will depend on the willingness of the main banks to take part.
There are some fears that rising property prices in the UK mean it is heading for a property 'bubble', with Help to Buy pushing up demand for homes at a time when the number of properties for sale is in relatively short supply.