Martin Lewis provides advice on 95% mortgage agreements
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Mortgage support has been heavily focused on by Rishi Sunak and the wider Government in recent months, as the state promised to turn generation rent into generation buy. To aid with this, several support schemes have been put in place to boost homeownership such as the stamp duty holiday and the mortgage guarantee scheme.
This is on top of existing efforts such as the Help to Buy, Right to Buy and shared ownership schemes.
However, a new study from First Mortgage showed 44 percent of first-time buyers have either borrowed or been gifted money from their parents to be able to buy a house, while just 21 percent have used a Government scheme.
David McGrail, a compliance director at First Mortgage, commented on these results.
He was particularly critical of the Government, as he said: "What this research shows is what I have thought all along: the Government has not gone far enough in supporting first-time buyers.
"The stamp duty holiday, whilst welcomed by many looking to upsize, has not helped first-time buyers in getting on the property ladder.
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© GETTY/PA IMAGESBuyers
"I'm hopeful that the recent launch of the mortgage guarantee scheme will have the desired effect, but the uptake remains to be seen."
This issue appears to be prevalent across many parts of the UK, with recent research from First Mortgage showing that over half (57 percent) of first-time buyers in London are reliant on their parents for getting the money together for a mortgage deposit.
Outside of the capital, the West Midlands is the "headquarters of the bank of mum and dad" with 54 percent using this to help buy their first home. At the other end of the table, South West (28 percent), Scotland (28 percent) and East Anglia (34 percent) were least reliant on their parents for financial support.
David continued: "We can see that the split across the county in terms of where people are most and least reliant on the bank of mum and dad is often in line with the more expensive regions for house prices.
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"This means that for those first-time buyers wanting to get on the property ladder in these regions, often the Government schemes haven't been enough on their own to make it affordable, hence why they rely a lot on their parents.
"Especially in the last year with the lack of high loan to value mortgages, first-time buyers with less than a 20 percent deposit would've struggled to get approved for a mortgage.
"I'm hopeful now that lenders have started to put 90 percent and 95 percent mortgages back on the market, we could still see 2021 as the year of the first-time buyer."
Further analysis highlighted some schemes are having a bigger impact than others, as while the Help to Buy scheme was looked into the most by first-time buyers, only 29 percent of those surveyed ended up using the scheme.
© EXPRESSMortgages
Additionally, the Right to Buy scheme was only utilised by 19 percent of new buyers and the new build shared ownership scheme was taken on by 22 percent.
The same result showed 60 percent of first-time buyers took advantage of the stap duty holiday when purchasing a home but, due to the normal first-time buyer stamp duty threshold being higher, this scheme was not a driving factor in helping them get on to the property ladder, according to First Mortgage's analysis.
First-time buyers in England can apply for Help to Buy equity loans which are provided by the Government to help with the cost of buying a newly built home.
The scheme allows buyers to purchase a home with a five percent deposit, with the Government providing an equity loan of up to 20 percent and would-be buyers can contact local Help to Buy agents based around England to apply for the scheme.
Local Help to Buy agents can be found through www.helptobuy.gov.uk.
This scheme can also be utilised in conjunction with Help to Buy or Lifetime ISAs, which can provide a 25 percent boost to savings if they're used to buy a home.
For those who can't quite afford the mortgage on 100 percent of a home, the Help to Buy shared ownership scheme offers savers the chance to buy a share of the home (between 25 and 75 percent) and pay rent on the remainder.
Down the line, the applicants involved will be able to buy bigger shares of the home if they can afford it and this scheme is also applied for through Help to Buy agents.
The Right to Buy scheme allows eligible council tenants to buy their council homes at a discount and to do this, a RTB1 form will be needed, with full details provided on the Government's website.