Lovell Homes offer solution for missing movers

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A study by the Council of Mortgage Lenders on missing movers – those who are already on the property ladder but unable to progress further – claimed that movement among home owners has been in deep decline for the past three decades and may continue to fall.

The number of home sales in the UK dropped after the recession (1.6m in 2008, dropping to 860,000 in 2009) but by 2014 had risen again and remained steady at 1.2 million.

But compared to pre-recession figures this still means there are 400,000 fewer transactions each year with nearly 80% of these believed to be movers with mortgages who have too little equity or borrowing capacity to make it worthwhile moving up the ladder.

However, there is a solution which can provide assistance for these mortgaged-movers, also known as second steppers, in the form of the Government’s Help to Buy: Equity Loan scheme.

Often mistaken as an initiative only available to first time buyers, Help to Buy is available on new-build properties up to £600,000 and effectively finances the additional injection of equity needed to move into a larger property by providing up to 20% of the value of the property in the form of an interest-free loan for the first five years.

This means the purchaser only requires a 5% deposit and with the 20% equity loan can then access mortgages of up to 75% of loan to value.

Lovell Homes’ development The Laureates in Cockermouth offers Help to Buy across its collection of 217 new homes, including its four and five-bed luxury homes, which are ideal for that next step up the ladder. Set among extensive landscaping and boasting outstanding views of the Lake District, these homes are perfect for growing families.

Based on the Tate four-bedroom home at The Laureates, which is £315,000, the Help to Buy: Equity Loan scheme would see the Government provide a 20% loan amounting to £63,000* – making this type of home much more accessible for those who previously thought they would be limited to a house with a value of £250,000.

The buyer would need to provide a 5% deposit of £15,700 which would enable them to keep, or re-invest, any further capital released from the sale of their current home.

And for those who take advantage of Help to Buy at The Laureates in the next few weeks, they will be able to settle into their new home before the new year.

Clare Noakes, regional sales director for Lovell North West, said: “This report outlines the difficulty a lot of buyers face when trying to make that move up the ladder and The Laureates is ideally placed to help those who are looking for a bigger home but don’t have the equity to do anything about it.

"We have a fantastic selection of high-spec four and five-bed homes, located a short distance from Cockermouth town centre, which are all eligible for the Government’s Help to Buy scheme and we’ve already seen a number of families take advantage of this fantastic opportunity.”

*The £63,000 is interest free for the first five years and then and then charged at 1.75% of the market value of the property, rising annually by RPI plus 1%.

The Equity Loan can be repaid at any time. The mortgage eligibility for the 75% would be based on borrowing £236,250.The interest rates on a 75% mortgage are more favourable than higher LTVs.

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