The three and a half year scheme, which will be run in partnership with house builders, will be available to all buyers in areas of housing pressure and first time buyers across Wales and will support the purchase of up to 3,000 new build homes up to value of £250,000. Rather than funding being made directly available to buyers, the Welsh Government and house builders will act as guarantors so that buyers can secure high loan to value mortgages that would not otherwise be available to them. Buyers will contribute a 5% deposit.
The scheme, which the Welsh Government is supporting with a £27m guarantee, could enable an investment in housing of up to £500m within a three year period.
Announcing the scheme, Housing Regeneration and Heritage Minister, Huw Lewis said:
“This innovative scheme is excellent news for potential house buyers, the housing industry and the wider economy. Not only will it help people whose plans for buying their first home or for moving to a bigger home have stalled due to lending restrictions from banks, but it will also provide house builders with potential new customers, and therefore will boost house building which will in turn create jobs and stimulate growth.
It is part of the whole housing system approach which I outlined in my Housing White Paper and just one of the ways in which we are working to create more affordable homes and to increase the supply, choice and quality of housing both to rent and to buy.”
Finance Minister Jane Hutt added:
“When we published the Wales Infrastructure Investment Plan for Growth and Jobs in May we made housing one of our key infrastructure priorities. We also gave a commitment to look at new innovative ways of financing infrastructure in Wales to support the Welsh economy.
“The mortgage guarantee scheme is delivering on our commitments by creating a potential investment in housing of up to £500m within a 3 year period. We will now be working with the Council of Mortgage Lenders and House Builders Federation to ensure the scheme is up and running by Spring 2013.”