New scheme could help first time buyers

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by Kay Murchie

The Government has launched a new scheme called Open Market Homebuy Scheme (OMHB) which could assist first time buyers onto the property ladder.

One of four lenders participating in the scheme is the Yorkshire Building Society which has already committed over £100 million to properties being bought through the Scheme, with the majority of borrowers being under the age of 30. Public sector key workers such as teachers, medical staff and police officers are the most likely to apply for a mortgage through the scheme.

The scheme was introduced in October 2006 and it allows applicants to purchase a house of their choice with zero deposit and a mortgage of just 75% of the property value. The average purchase price of properties bought through the Scheme is approximately £160,000 with mortgage payments based on a loan of just £120,000. This results in a monthly interest payment of £665 compared to a conventional 100% loan to value mortgage where the monthly interest payment would be £812.

The Scheme is available throughout England and Wales, but it is proving to be popular in London and the South East. Continued rising property prices have made it difficult to buy a house in these areas.

This scheme may not be the solution for all first time buyers but it is providing support to many people.