Insurance News Archive

Equity schemes 'lower risks for lenders'

An expert has praised the government's first-time buyer equity scheme, saying it lowers the risks for both purchasers and lenders.

Helen Adams, managing director of FirstRungNow.com, asserts that mortgage lenders can be reluctant to lend to first-time buyers, but shared equity schemes such as the government's HomeBuy Direct help to lower the uncertainties for providers.

She feels that MPs are doing all they can at the moment: "They are trying to support the economy and encourage lenders to lend, and try to see to it that first-time buyers can buy first time. I don't think there is a huge amount they can do right now."

Last week, the government announced that it was making an extra £100 million available to its shared equity scheme, which was originally launched in September with £300 million funding.

The government says HomeBuy Direct - in which purchasers will receive an equity loan part-funded by the state and investors - will help up to 18,000 people across England to buy their first home.

23 Dec 2008