Shortly after revealing that the UK’s interests rates are to be cut to 0.25% earlier today, Bank of England Governor Mark Carney added that a Bank of England scheme to get existing homeowners onto the buy-to-let property ladder will roll out in the autumn.
The world’s first help-to-buy-to-let scheme will include most of the UK’s major banking institutions, and it will be backed by £10bn of funds from the Bank of England – it is hoped that it will provide assistance to hundreds of thousands of homeowners who feel ‘trapped’ by mortgage payments that are 50% of market rents.
To explain more details about the help-to-buy-to-let scheme, HTBTL chairman Sir Shirton Shirley spoke to Southend News Network’s Chief Reporter.
He said: ‘We have spoken to homeowners all over the UK, some of whom are in their early 40’s, and it is clear that one of their main concerns in life is that they will never be able to afford a second home that they can then rent out to someone who doesn’t own a home of their own. This is why we are taking this drastic but necessary action.’
‘Under the scheme, anyone applying for a HTBTL mortgage will be required to pay a 25% deposit for their new buy-to-let property, and this will be paid upfront by the government’s access to the Bank of England fund. Once the purchase has been completed, the applicants will not be allowed to apply for another HTBTL mortgage for six months.’
Leigh On Sea resident Teresa Browne has been saving up for a buy-to-let mortgage deposit for the last six weeks, and she admitted that she was ‘delighted’ with the news.
She said: ‘I was really worried that voting to leave the EU would lead to the Bank of England doing something really silly, like printing a huge amount of money and just chucking it into the economy to see what happens. However, I am delighted that action is being taken to make sure that homeowners can continue to develop into multiple homeowners – I’ve always fancied being a landlord.’
Harry Clearasil is an estate agent with Gareth Zump and Co. in Southend On Sea, and he told Southend News Network that this has been a fantastic day for the real estate sector.
He said: ‘This has been a fantastic day for the real estate sector. Every evening, I walk home down Southend High Street and I see countless child-free couples holding Costa Coffee cups and staring into estate agency windows with a look of utter desperation on their faces.’
‘I can totally sympathise with their situation. Being frozen out of the buy-to-let market is becoming a huge social issue in the United Kingdom, and I am amazed that there are not more charitable organisations who are dedicated to helping this growing sector of society. I know that we say this all the time in local news coverage, but speaking as an estate agent there really has never been a better time to do whatever this article is focusing on.’