News

Mortgage Indemnity Guarantees policy to launch on 14/3/2012

  • January 24, 2012
  • By Hunters Law

The policy will see the government, developers and lenders share the risk on 95% loan to value mortgages on new build properties.

It is hoped that this will assist up to 33,000 new home purchases each year until the end of the parliament.

The policy is open to all qualifying purchasers. Full details of the criteria have yet to be published, but it is not expected to be limited to first time buyers although Buy-to let and second home purchasers will be excluded from the scheme.

Under the scheme the purchaser pays a 5% deposit, with the lender providing the balance of the purchase price applying their usual criteria for eligibility.  However, to mitigate the risks run by the lender the house builder deposits 3.5% of the property value into an indemnity fund, whilst the government also provide a guarantee for 5.5% of the property value.  The lender takes the usual risk on the remaining value of the property whilst the purchaser takes on exactly the same risks as under a conventional mortgage.

It is hoped that house building will be boosted by giving this additional protection to lenders and by providing potential purchasers with access to higher loan to value ratio mortgages than are normally available.

For further information on the potential role of Mortgage Indemnity Guarantee in residential transactions, please do not hesitate to contact Katie Wright.

Related News

Jun 15, 2021
James Letchford discusses the code for leasing business premises
Jun 02, 2021
Ian Layzell-Smith discusses excluding security of tenure from a commercial lease
May 26, 2021
James Letchford discusses authorised guarantee agreements
May 18, 2021
James Letchford discusses ‘green leases’ of commercial properties
May 04, 2021
Scott Battram examines the London and South East property market in 2020 and provides predictions for 2021
Apr 14, 2021
Peter Robinson discusses the practical issues arising from registration of land as a Town and Village Green (“TVG”)
Mar 24, 2021
Peter Robinson has been featured in the 2021 Spear’s Property Advisers Index
Feb 08, 2021
Peter Robinson discusses Indexation Based Rent Reviews
Jan 19, 2021
Peter Robinson comments on what new and existing landlords need to know in RBS HomeWise
Jan 04, 2021
Peter Robinson discusses The Supreme Court’s decision in Alexander Devine Children’s Cancer Trust v Housing Solutions Ltd

© Hunters Law LLP 2021 | Privacy NoticeLegal & Regulatory | Cookies Policy | Complaints Procedure.

Hunters Law LLP is authorised and regulated by the Solicitors Regulation Authority (number 657218)