Developers given £40m from FirstBuy scheme
By Vivienne Russell | 11 October 2012
Housing minister Mark Prisk has announced the first allocations from the £280m extension to the FirstBuy scheme, which helps people get on the property ladder.
Under the scheme, first-time buyers are given an equity loan of up to 20% of a new-build property from a participating developer. The loan, which is jointly funded by the government and the housebuilder, can reduce the deposit requirement to just 5%.
The scheme received a funding boost last month when the prime minister announced an extra £280m.
A total of 41 developers will share in the first £40m allocation from this extension fund. The government estimates that it will help 2,500 prospective buyers.
Prisk said: ‘FirstBuy has already proved hugely successful, providing a practical alternative to the Bank of Mum and Dad for thousands of first-time buyers across the country.
‘The scheme has become a major player in helping people onto the property ladder and getting Britain building again – and I’m determined to maintain that momentum.’
Pat Ritchie, chief executive of the Homes and Communities Agency, which makes the allocation decisions and passes the funds on, said she anticipated a ‘strong bid response’ from developers for the remaining £240m.