Mortgage and protection adviser Scott Richford, from Mortgage Talk, says that with a range of incentives available buyers may not need hefty deposits to secure a mortgage and could find that owning their own home is cheaper than renting.
For example, at Debut @ Selby, purchasers can defer paying up to 25% of the price of a studio apartment with 'easi:buy' and could find that their mortgage repayments are less than £200 a month.
Scott explained:
"I regularly speak to people who are paying more in rent than they would be in mortgage repayments if they were to utilise the Government-backed HomeBuy Direct scheme or Redrow's own 'easi:buy' incentive.
"By enabling people to purchase with a low deposit these schemes have provided a welcome boost to the housing market in areas where young first time buyers have struggled to buy a home of their own."
Available at Debut @ Selby and Mulberry Grange in nearby Hambleton, 'easi:buy' lets customers defer paying between 20 and 25% of the price of a brand new home for up to 10 years. For example, a one-bedroom apartment at Debut at Selby, on the market at £52,999 could be snapped up for an initial outlay of only £39,749.
Alternatively, HomeBuy Direct is available at Saxon Court in Sherburn in Elmet; Wheatley Chase, Halifax; Priorpot Mews, Malton; Danum St Giles, Doncaster; Kirk's Paddock, Grimsby; and Fox's Fold, Barton upon Humber.
It enables eligible customers with a household income of less than £60,000 to take out an equity loan for up to 30% of the purchase price. The loan is interest free for the first five years and can be repaid when the customer has more money available or they come to resell.
The Government-backed scheme is open to first time buyers, those starting over after a change of circumstances, such as divorce, and growing families in need of extra space.
Scott says that ordinarily clients would be expected to raise deposits of around £30,000 to buy a three-bedroom home on the market at £153,999 at Priorpot Mews in Malton. But with HomeBuy Direct some lenders won't demand such a high percentage deposit, which means customers may only need to save £5,389.
Scott explained:
"Mortgages can be easier to obtain when combined with 'easi:buy' or HomeBuy Direct, as the deferred element or equity loan is effectively seen as part of the deposit. The schemes also give buyers access to some lower interest rates.
"Priorpot Mews in Malton is a prime example. I have many clients who have purchased there who wouldn't have been able to two or three years ago. The lower deposits needed under HomeBuy Direct are much more achievable.
But not every Redrow customer is buying their first home. The developer also has incentives to help those moving up the property ladder, including part exchange.
Patsy Aicken, sales manager for Redrow Homes (Yorkshire), explains:
"Those with an existing property to sell may be able to use it as part-payment. We effectively act as a 'cash buyer', allowing our customers to trade up to a bigger, better, brand new home without having to find a buyer for their old one. It means they don't get stuck in a housing chain and they don't have to find any estate agent's fees."
