‘Your First Home’ Initiative - a little breakdown of what we know so far…

Written By Amy Flanagan

Last week the government released plans of a new initiative aimed at helping first time buyers get onto the property ladder. Not much in the way of specific detail has been released so far, but here is what we know:

  • A contribution of at least a 2.5% deposit

  • An equity loan from the government of up to 20%

  • This equity loan will be interest-free for an initial period (we don’t know what that is yet)

  • Tied to a new build property from a developer that has signed up to the initiative

  • Eligibility, criteria and caps will apply

The Pros-

  • Helps first time buyers actually get onto the property ladder

  • Will potentially help secure a better rate as the loan-to-value will be better

The Cons-

  • Generally new builds are higher priced. House prices have come down over the last year or so. You run the risk of falling into negative equity if you put down such a small deposit. What that means is that you will owe more than wha the house is worth

  • The equity loan repayments could be expensive

  • The 20% equity loan is based on the property price, if your house increases in value, you’ll have to give 20% back when you sell

Amy Flanagan
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