A leading estate agent has welcomed a scheme to help young home buyers in the Isle of Man.
Tynwald has approved the Department of Health and Social Care’s shared equity scheme.
Tim Groves of Black Grace Cowley said: ‘This is fantastic news for the Isle of Man and its local property market.’
The schemes launch today (Thursday) and will replace the current grant and top-up loan assistance available under the House Purchase Assistance Scheme 2012.
For the first time the government has differentiated between the maximum purchase price of properties bought on the open market and ‘approved’ properties, to enable more choice for first time buyers and help the housing market on the island.
Mr Groves said: ‘As agents, we’re all extremely pleased that such flexibility has been included, although the qualifications for successful application still remain which is an important factor.
‘Another important change for applicants to be aware of is the requirement to provide a deposit of 5 per cent of the house purchase price as a condition of the department providing assistance.’
The first principle of the shared equity schemes, as with previous house purchase assistance schemes, is that they are intended to help those who cannot help themselves to get onto the first rung of the housing ladder.
Shared equity means that, subject to the first time buyer meeting the eligibility criteria, the government can buy a share in a property of between 20 per cent and 30 per cent, which will be interest-free for two years with the ability to buy-out the department’s share over time.
This support reduces the burden of mortgage capital and interest repayments, which can make all the difference in the first few years of home ownership and can make the possibility of affording the first rung on the property ladder a reality.
Mr Groves said there would be two distinct pathways available to qualifying individuals and couples:
- ‘First Home Fixed’ which relates to the ‘approved’ properties, allocated by the department to applicants on the Register of First Time Buyers
- ‘First Home Choice’ which applies to properties bought on the open market.
The ‘First Home Fixed’ scheme targets those most in need of assistance, who have lower incomes and need greater support to meet their housing need through purchasing approved properties up to a value of £160,000.
The ‘First Home Choice’ scheme is targeted at first-time buyers with slightly higher income levels seeking to purchase on the open market, giving those who would not be able to buy a home without government help the opportunity to get a foot on the property ladder.
It provides greater flexibility for applicants by providing access to a wider choice of properties up to value of £190,000.
Mr Groves said: ‘This proposal has been conceived with the intention of creating a permanent set of circumstances that assist qualifying persons in the purchase of open market and new build residential properties in partnership with the government.
‘The objective behind this proposed scheme is to stimulate the island’s housing market from the grass roots upwards towards a maximum threshold/purchase price taking a long term view.’
For more details, ring the DSC’s housing team on 685955.