The Home Loan Scheme

There exists a government-sponsored scheme for assisting first-time home buyers. The scheme offers a tax-free bonus and an interest-free loan to those people who have been saving for at least two years under the scheme. In addition to the bonus, of course, normal interest will be paid on the investment by the savings institution.

To take advantage of this scheme a person must agree to save regularly (no minimum amounts are laid down) with any of the many acceptable institutions, including banks, friendly societies, building societies, National Girobank, National Savings Bank and Trustee Savings Banks, and must inform the institution that he wishes to participate in the scheme.

One year before he applies for the bonus he must have at least £3000 in his account, and during the succeeding year the balance must never fall below that figure. At the end of the second year he will, if he then takes out a mortgage on a first purchase of a property priced at not above a figure laid down from time to time by the government, qualify to receive:

(a) a tax-free cash bonus, additional to the interest earned, of up to £110, and

(b) provided he has a minimum of £600 in his account, the government will lend him £600 on top of the building society loan, free of interest for five years.

This can be an extremely valuable facility for young, first-time buyers of low-priced properties, since it may enable them to buy a home without first having to save up the full 10% of the purchase price. (The above figures applied in 2016.)


Further Advances

Building societies lend, in general, only for the purpose of enabling their members (investors or borrowers) to buy their own homes or to move to another home. Building society mortgages are not available for facilitating the acquisition of a holiday home or for the financing of the purchase of any asset other than a private residence.

It is, nevertheless, normal for an existing borrowing member to be allowed to increase his loan for any purpose that improves the value of the property. For example, further advances (additional lending) may be made for the purpose of installing central heating,... see: Further Advances


Refunds, Personal And Business Finance 2017

  • You can send us an email if you want to know more about waht we do and we will get back to you as soon as we are able.

  • Want to be a published author
    We publish articles on this site if they fulfil our requirments. more>>