No more starter loans - for now

Monday 03 February 2014

A six-month scheme to help first-time buyers get the deposit to buy a home has closed - but might return later in the year.

The £3 million Starter Home Deposit Loan Scheme was set up last July to help people take their first step on to the property ladder. There have been 53 successful applications to the scheme, 20 of which are for transactions to be completed in the coming weeks – in all, £2.5 million has been loaned.

Borrowers had to produce at least 5% of the total value as a deposit, with the States paying up to 15% and the rest coming from approved mortgage lender Skipton International Limited.

Housing Minister Andrew Green said that the scheme had worked well, but that his department would review it carefully to see if it was still needed, given changes in the housing market.

He said: “The scheme has supported just the sort of people that we want to support – the hard-working people who have saved the other 5% of their deposit, but who need a bit of a hand.

“We will be carrying out a full review to see what we can learn, and see what went well and what didn’t go quite so well. The industry have told us that, contrary to some of the things that were said early on, we did not have an adverse effect on the price of houses.

“When we carry out the review we will consider the market place and decide whether to bring it back. If we do, it won’t be until later in the year. If we don’t, that doesn’t mean it hasn’t worked – if the market has changed, it might not be an appropriate thing to do.”