BUDGET: Help for Norfolk first-time buyers?

PUBLISHED: 18:38 23 March 2011

Norwich South MP Simon Wright

Norwich South MP Simon Wright

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A scheme which aims to give a helping hand to first-time buyers struggling to raise a deposit has been hailed as a potential shot in the arm for the region’s construction industry.

Chancellor George Osborne yesterday earmarked £250m from the Bank Levy to help around 10,000 households with incomes of up to £60,000 buy a new-build property.

Under the FirstBuy scheme, buyers will be expected to put up a 5pc deposit on a new home, while the Government and housebuilders jointly fund a loan worth up to 20pc of the property’s valye.

That loan will be interest-free for the first five years, with interest charged at 1.75pc in the sixth year and at inflation plus 1pc afterwards.

Mr Osborne said: “Average mortgage deposits are close to 30pc and this puts home ownership beyond the reach of many, many families. This is not fair.”

The government hopes the scheme will also provide a boost to the construction industry and support up to 50,000 jobs, after the number of new homes that were built fell to their lowest peacetime level since 1923 last year.

Jon Gibbs, sales director for Persimmon Homes Anglia welcomed the FirstBuy scheme, and said: “We recognise just how important first time buyers are in sustaining the property market and the prediction that the new FirstBuy shared equity scheme is expected to help 10,000 families get onto the property ladder is welcome news.”

Tony Abel, managing director of Little Cressingham-based Abel Homes, said: “The size of deposit that first time buyers require to get a mortgage has been a significant factor in holding back the market and discouraging house builders from bringing forward new sites.

“As ever, the devil will be in the detail, but if the scheme genuinely does help 10,000 first-time buyers enter the market, this will stimulate the construction sector, as well as provide stimulus to get the market moving further along the chain.”

Norwich South MP Simon Wright said: “The support announced in the budget will, I hope, support many first time buyers locally and provide a real boost to the construction industry.

“We’ve seen a real slump in first time house buyers in the last few years, and I’m pleased to see the chancellor respond with hard proposals to address the struggle faced particularly by young people hoping to get on the housing ladder.”

But critics have questioned how many families will actually benefit from the scheme, with Shelter describing it as “a sticking plaster on a broken leg” which would have little impact on the housing crisis.

The chancellor also confirmed stamp duty changes, with it being levied on the mean value of homes being bought – not the bulk cost.

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