Mortgage guarantee boost for potential buyers and builders
13th November 2012
The Welsh Labour Government is to roll out a new mortgage guarantee scheme to help people take the first step onto or to move up the property ladder in the Spring of 2013.
The three and a half year scheme, which will be run in partnership with house builders, will be available to all buyers in areas of housing pressure and first time buyers across Wales and will support the purchase of up to 3,000 new build homes up to value of £250,000. Rather than funding being made directly available to buyers, the Welsh Labour Government and house builders will act as guarantors so that buyers can secure high loan to value mortgages that would not otherwise be available to them. Buyers will contribute a 5% deposit.
The scheme, which the Welsh Labour Government is supporting with a £27m guarantee, could enable an investment in housing of up to £500m within a three year period.
The Welsh Labour Government has said that it will be working with the Council of Mortgage Lenders and House Builders Federation to ensure the scheme is up and running by Spring 2013. Should homeowners default on the loan, any losses would be covered by any equity they have in the property in the first instance, followed by the house builder’s indemnity fund, which equates to 3.5% of the loan value. The Welsh Government would be third in line to make good any losses.