Surge in interest in Help to Buy in Devon as local lenders call for larger deposits

House hunters in Devon keen to buy their next new home are increasingly looking to Help to Buy as the range of mortgage options offered by lenders shrinks.

With fewer high loan to value deals available, house buyers are facing the difficult prospect of raising larger deposits in order to have their mortgages approved.

Sara Parker, Sales Director at Bloor Homes South West, said: “Since the coronavirus pandemic, securing a mortgage can be incredibly challenging, with most mortgage lenders looking for buyers to put down a deposit of around 15% of the value of the home.

“In Devon, where the average asking price according to home.co.uk is £345,741, that equates to a whopping £51,861. This is simply out of many buyer’s reach, leaving them struggling to secure funding for their home purchase.

“With Help to Buy, buyers are required to put down a deposit of just 5%, with 20% provided by way of a government-backed equity loan, which is interest free for the first five years. Buyers can then secure a mortgage for 75% of the value of the property. This larger deposit means more choice of mortgage deals.

“Clearly there’s a huge difference in affordability between saving for a deposit of £17,287 versus £51,861. And once again, it’s first-time buyers who are the worst affected as they have no existing equity in a property and usually have less in savings.

“That’s why so many of our buyers are looking to take advantage of Help to Buy before the scheme ends at the end of March 2021 for all but first -time buyers. The stamp duty holiday also offers the chance to save up to £15,000 on the purchase of a new home up to the value of £500,000; money which can be put to good use towards a deposit instead.”

Saving for a 15% deposit takes the average first-time buyer some 10 years, depending on income, how much they are able to put away each month and without help from family.

Sara continues: “Time at home has forced many of us to reassess the suitability of our existing homes and many of our buyers are looking for extra space, perhaps an additional bedroom to house a home office, or own private garden.

“Home ownership is a universal aspiration and we are committed to helping as many buyers as possible to attain this. Help to Buy can be used at our Seabrook Orchards development in Topsham and Bloor Homes @Pinhoe development near Exeter. We would encourage all our buyers to take independent financial advice from a trusted source.”

To find out more about Bloor Homes’ developments across the South West, please visit www.bloorhomes.com.