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Budget 2013: Wealthy house-buyers look to take advantage of mortgage aid.

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Budget 2013: Wealthy house-buyers look to take advantage of mortgage aid.

Post  Panda on Sat 23 Mar - 2:16

Budget 2013: Wealthy house-buyers look to take advantage of mortgage aid

Affluent house hunters have been contacting estate agents in some of
Britain’s most expensive postcodes to ask how they can benefit from the new
state mortgage assistance scheme unveiled in this week’s Budget.

The Government is offering
interest-free loans to help people buy new build

By Sam Marsden

10:22PM GMT 22 Mar 2013


Under the “Help to Buy” programme, buyers will only have to save up a 5 per
cent deposit, with the Government underwriting a further 15 per cent of the
value as long as the property is worth no more than £600,000.

George Osborne, the Chancellor, said the initiative would help families who
“cannot begin to afford” the large deposits currently needed to get a mortgage
at a good interest rate.

However, there is nothing to stop high earners from using the multi-billion
pound scheme and early anecdotal evidence suggests that it is likely to benefit
large numbers of relatively wealthy people.

High-end estate agents reported yesterday that they had already received
interest from well-off clients looking to take advantage of the Government’s
support to buy houses costing over half a million pounds.

Ed Mead, a director of Douglas & Gordon, which operates in upmarket
districts of London such as Kensington and Chelsea, said it appeared that the
scheme was “not necessarily going to help those most in need”.

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“I’ve had a few calls to discuss this, which is surprising given that the
sort of people we deal with aren’t usually associated with help getting a
mortgage,” he said.

“Given the limit at £600,000 and lack of salary cap surely this is going to
appeal to those wanting really quite nice property - for example three-bedroom
flats and houses in Battersea and Wandsworth [in South-West London]. If I was
being cynical I’d call those Tory voters.”

Jamie Lester, head of Haus Properties, which has offices in Fulham and
Chiswick, South-West London, found himself inundated with questions about “Help
to Buy” from people looking to buy and sell desirable homes when he held a
property seminar on the evening of Wednesday’s Budget.

He said: “There was a huge amount of interest, with people wanting to know
what the scheme will mean for them - but as always the devil will be in the

The Government’s mortgage assistance programme has two components: from next
month it will offer interest-free loans of up to 20 per cent of the value of new
build homes, and from January it will underwrite mortgages for people with small

Countrywide, Britain’s largest estate agent, said it had received a surge of
inquiries from potential buyers since the Budget.

James Poynor, managing director of the firm’s new homes division, said: "New
customers are certainly showing an increased interest and looking for more
detail around the scheme.”

Mortgage brokers also reported that many clients had contacted them with
questions about “Help to Buy”.

David Hollingworth, from brokers London and Country, said: “We have had quite
a few inquiries considering that there isn’t any end product to talk about at
the moment.

“That is quite encouraging and suggests that people are interested in finding
out what the options are. Awareness should be higher than we have perhaps seen
with previous schemes.”

He said the Chancellor’s decision to raise the property value limit for the
programme to as high as £600,000 was a “significant” move.

“Some of these schemes in the past have tended to be playing around the edges
and the end result was they helped a fairly small niche of people. This moves it
on from that quite substantially,” he added.
So it looks as though the rich will benefit , surely this scheme was meant for first time buyers? another ill conceived idea from Osborne.!!!
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