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S P R I N G 2 02 2
RESIDENTIAL PROPERTY
NEWSLETTER
30% discounted
homes
for first time
buyers
In this issue
Help to Buy for new-build Commonhold to give New 95% mortgages now
homes gets underway leaseholders more control available for home buyers
30%
discounted
homes for
first time
buyers
First time buyers are being
offered discounted homes
as part of a new government
housing scheme.
The First Homes scheme will help local at least 10,000 homes a year being Home website which provides a
first-time buyers on to the property delivered in the years ahead and more if single gateway for all routes to home
ladder by offering homes at a discount there is demand. ownership.
of at least 30% compared to the market
price. Major high-street lenders Halifax and Housing Secretary Robert Jenrick said:
Nationwide Building Society, along with “These homes will be locked in for
That same percentage will then be local building societies and community perpetuity to first-time buyers and key
passed on with the sale of the property lenders, announced that they will be workers from their local area – making
to future first-time buyers, meaning offering high loan-to-value mortgages them an asset to both their owners and
homes will always be sold below market against First Homes to support the roll- the wider local community.”
value – benefiting local communities for out of the scheme.
generations to come.
First Homes follows on from the 95%
The scheme will support local people mortgage guarantee scheme which
who struggle to afford market prices helps first-time buyers secure a
Please contact us if you
in their area but want to stay in the mortgage with just a 5% deposit and would like more information
communities where they live and work. the government’s ‘Own Your Home’
campaign showcasing the range
about the issues raised in
The first properties went on the market of flexible home ownership options these articles or any aspect
in Derbyshire on June 4. Further sites available.
are set to launch across the country in
of residential property law.
the coming weeks. A further 1,500 will First-time buyers can find the right
enter the market from the winter, with scheme for them via the Own Your
Help to Buy for new-build homes gets underway
Help to Buy (2021-2023) has regional How much you can spend on your home
First-time buyers interested price limits, set at 1.5 times the average will depend on which region it is in.
in new-build homes can now first-time buyer price in each region in
England. In the North East it is £186,100; North
apply for the new Help to West 224,400; Yorkshire and the Humber
Buy: Equity Loan scheme. This keeps the prices of new homes £228,100; East Midlands £261,900; West
closer to the average regional first-time Midlands £255,600; East of England
buyer property prices, reducing the £407,400; London £600,000; South East
amount that first-time buyers need to £437,600; South West £349,000.
With a Help to Buy: Equity Loan, the borrow.
government lends homebuyers up to You must fund at least 80% (60% in
20% (40% in London) of the cost of Help to Buy homebuilders must London) of the sale price with a mortgage
a newly built home. Customers pay a agree to follow the Consumer Code and put up at least a 5% deposit. Interest
deposit of 5% or more and arrange a for homebuilders, the New Homes fees start at 1.75% and rise each year
mortgage of 25% or more to make up Ombudsman, the Building Safety in April in line with the Consumer Prices
the rest. The equity loan is interest-free Charter and fulfil planning permissions Index, including owner occupiers’
for five years. and building regulations. housing costs, plus 2%.
New 95% subject to the usual affordability
checks.
mortgages now The Covid-19 pandemic has led
to a reduction in the availability of
available for high loan-to-value (LTV) mortgage
products, particularly for prospective
home buyers homebuyers with only a 5% deposit.
The new scheme is intended to
address that problem.
The government’s new scheme
to help people buy a home with a The mortgages are now available originated; evidence shows that
95% mortgage has now come into from lenders including Lloyds, loans are unlikely to default after
effect. Santander, Barclays, HSBC, NatWest such a period has elapsed.
and Virgin Money.
It means buyers can get on the The scheme is intended as a
property ladder even if they only The government will compensate temporary measure. It will be open
have a 5% deposit. The mortgages the mortgage lender for a portion of for new mortgage applications until
are available to both first-time buyers the net losses suffered in the event December 2022, in line with the
and existing homeowners for houses of repossession. The guarantee will government’s view that the current
costing up to £600,000. apply down to 80% of the purchase scarcity of high loan-to-value lending
value of the guaranteed property. is primarily a response to the
The government will offer lenders pandemic rather than a symptom of a
the guarantee they need to provide The guarantee will be valid for up longer-term structural change in the
mortgages that cover the other 95%, to 7 years after the mortgage is mortgage market.
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Commonhold to give
Meet the Team
leaseholders more control
Housing Secretary Robert Jenrick,
pictured below, said: “We are taking
The government is planning forward the biggest reforms to English
to give leaseholders more property law for 40 years – and the
widespread introduction of commonhold
control over their homes by builds on our work to provide more
developing a new collective security for millions of existing
leaseholders across England, putting
ownership system known as an end to rip-off charges and creating a
commonhold. fairer system.”
This builds on the announcement in the
Queen’s Speech, where the government
The commonhold model is used widely set out its intention to restrict ground
around the world and provides a rents for new residential long leases
structure for homeowners to collectively to a peppercorn. Earlier this year, the
own the building their flat is in, with government also announced changes
a greater say on their building’s that will mean that any leaseholder can
Address management, shared facilities and extend the lease on their home by 990
related costs. They are in control of years, on payment of a premium, and
their building through a ‘commonhold will no longer pay any ground rent to the
association’. freeholder.
Contact
There are no hidden costs or charges, A Law Commission report said last
preventing some of the unfair practices year that the leasehold system was not
Email currently seen in some leaseholds. working for home owners. Ministers
hope these changes will make it fairer,
The newly formed Commonhold Council cheaper and simpler.
Website will manage the system with the aim of
making home ownership fairer and more We shall keep clients informed of
secure. developments.
This newsletter is intended merely to alert readers to legal developments as they arise. The articles are not intended to be a definitive analysis of current law and
professional legal advice should always be taken before pursuing any course of action. Authorised and regulated by the Solicitors Regulation AuthorityYou can also read
