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New Mortgage Scheme To Help Buyers With Small Deposits To Be Part Of Next Week's Budget

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New Mortgage Scheme To Help Buyers With Small Deposits To Be Part Of Next Week's Budget

Struggling to save enough money to buy a house of your own? Of course, you are. We all are. But we have some good news.

The government is going to encourage lenders to offer 95 percent mortgages, which the Treasury said had 'virtually disappeared' during the pandemic, to help those with smaller deposits get their foot on the property ladder.

The scheme - which was one of the pledges at last year's Conservative Party Conference - is set to be introduced in next week's budget, BBC News reports.

Discussing the plans, Prime Minister Boris Johnson said: "I want generation rent to become generation buy and these 95 percent mortgage guarantees help to deliver this promise.

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"Young people shouldn't feel excluded from the chance of owning their own home and now it will be easier than ever to get onto the property ladder."

Despite the financial difficulties the country is facing, Chancellor of The Exchequer Rishi Sunak has promised to use the spring Budget to support those who have struggled over the past year.

Though he also acknowledged things are going to be tough.

Credit: PA
Credit: PA
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Speaking to the Financial Times about his plans, Mr Sunak said: "We went big, we went early, but there is more to come and there will be more to come in the Budget.

"But there is a challenge [in the public finances] and I want to level with people about the challenge."

He added: "I will do whatever it takes to protect the British people through this crisis and I remain committed to that."

In response to the global pandemic and the three separate national lockdowns introduced in England, the government has borrowed £271bn ($377bn) in this financial year alone.

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To put that into some kind of perspective, that's £222bn ($309bn) more than a year ago and has pushed the national debt to an astronomical £2.13 trillion ($2.96 trillion).

The latest announcement comes after the government confirmed it would be extending the Help to Buy scheme to stop first time buyers from missing out.

The strategy offers people an interest-free loan to get their first home in the bag.

Credit: PA
Credit: PA
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And while the deadline for the scheme was originally 31 March, the government has announced plans an extension to 31 May for those already proceeding with buying their house under the programme to help with obstructions caused by the coronavirus.

The loan originally meant that potential buyers could borrow up to 20 percent of the cost of a house - or 40 percent for those in London.

Those who take part will need to pay a deposit of at least 5 percent, and they must take out a conventional mortgage in order to make up the remaining amount for the property.

There are also eligibility requirements on the house, which must be newly built and can cost up to £600,000 ($835,000).

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It's also required that applicants can afford the monthly fee and interest payments, and not own any other properties .

Featured Image Credit: PA

Topics: covid, lockdown, UK politics, Pandemic, Property, Coronavirus, Budget, Politics, Covid-19

Dominic Smithers
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