YORKSHIRE home buyers with a deposit of less than £10,000 will be among those able to get a foot on the property ladder through the Government’s Help to Buy scheme, a property website says.
Aspiring home buyers will from this week be able to start applying for the second phase of the flagship initiative, which will offer state-backed mortgages to UK borrowers with deposits as low as 5 per cent.
The scheme, which has sparked fears of a new housing bubble, will give people a helping hand to buy a new or existing home worth up to £600,000.
The launch means the average buyer will be able to get on the housing ladder with a deposit of less than £10,000 in six out of 10 regions across England and Wales, analysis by Zoopla.co.uk found. These are the North East, the North West, Yorkshire and the Humber, the West Midlands, the East Midlands and Wales.
With the average asking price standing at £222,168 across England and Wales in October, Zoopla found the typical size of a 5 per cent deposit needed across the country would be £11,108.
There are around 665,000 properties on the market with asking prices under £600,000 which could be eligible for Help to Buy and the scheme would have the potential to knock £22bn off deposit requirements, it calculated.
London home buyers, at around £16,103, will still need to find the most money under Help to Buy, while those living in Yorkshire and the Humber will need to find the least, at £8,129 typically, according to the website.
Recent studies suggest that Help to Buy will considerably ramp up the appetite for home buying. One-third of people who are considering buying a home in the next year plan to turn to the scheme, according to a recent survey.
But experts have warned that many people will be left disappointed as lenders will still have tough rules in place to make sure that they can afford to pay their loan back.
State-backed lenders Royal Bank of Scotland (RBS) and Lloyds Banking Group, which together account for about one third of the mortgage market, will be taking part in the initiative, but several other major providers are still want to know further details about the costs and benefits before deciding whether to add their names to the list.
The initiative, which is set to run until January 2017, will see the state offer guarantees totalling around £12bn to unlock £130bn of high loan-to-value mortgage lending.
Phase two will initially be available under the NatWest, RBS and Halifax brands. RBS/NatWest plans to help 25,500 buyers through the scheme over the next three years and it will extend its opening hours to meet customer demand.
Some experts argue the Government should ditch the second phase of Help to Buy, which they fear will artificially inflate house prices by ramping up demand at a faster rate than the supply of homes coming on the market.