The Welsh Government has announced £174.5m of funding to help home-buyers in Wales get on the property ladder.
‘Help to Buy’ Cymru is expected to launch by the end of this year and will follow a similar scheme that has been running in England since April.
The shared-equity scheme, designed to help the housing market and construction industries, will enable buyers who can only afford small deposits to purchase new build homes in highly desirable areas such as Penarth and Cardiff Bay.
The scheme allows those looking to move onto the property ladder to do so with a 5% deposit combined with a loan for 20% of the purchase price of the property from the Government which is interest-free for the first five years.
The benefits of the scheme mean that customers who can afford the repayments will be able to get high value mortgages (80-95%) on a range of houses up to the value of £600,000.
There have been concerns that this new offering may result in increased house prices, and the Royal Institution of Chartered Surveyors (RICS) has suggested that an annual cap should be set at 5% to prevent the market from encouraging buyers to overstretch themselves for fear of missing out.
However, for those people who have been deliberating over a property move, ‘Help to Buy’ could offer the right opportunity to purchase a larger home or move to a more desirable area with good schools or lower crime rates. Unlike many existing schemes, ‘Help to Buy’ Cymru will also be available to home movers, who meet the relevant eligibility criteria, as well as first-time-buyers. This is good news because, as people move on to larger homes it also frees up more properties that are suitable for first-time-buyers.
Tony Jones, managing director of ACJ Properties, said:
“Prospective buyers who are looking for their new home in Penarth, Cardiff or Barry and want to take advantage of the scheme should start preparing now. Check your finances to make sure you are in the best possible position for when ‘Help to Buy’ comes into place.
“Make sure you do your research and understand the requirements of the scheme and get advice from a good reputable agent.”