High Level Support For First Time Buyers Scheme

A metaphorical 'tightly-bolted door' that is keeping many first-time house buyers out of the market, could be about to be unlocked, through a new bank-led initiative.

Ulster Bank has joined forces with property developers from across Northern Ireland to support hard-pressed first-time buyers onto the property ladder.

The new initiative will allow homebuyers access to the local housing market without the need to fund a deposit, and with added protection against house price volatility by up to 15%.

The scheme, which is being rolled out by Ulster Bank in conjunction with a number of leading residential developers from across Northern Ireland, will be available to first time buyers from early September.

A key feature of the new mortgage product is a 5% deposit on the property contributed by the developer, repayable by the buyer only in the event of the property price rising by 5% or more after five years.

The buyer will also be safeguarded up to an additional 10% against any fall in property value over that five year period.

The move has today found favour in high places as NI First Minister Peter Robinson and the Deputy First Minister Martin McGuinness have welcomed the announcement.

Mr Robinson said: "At our meeting with the banking institutions in July the Deputy First Minister and I called on the banks to address the lack of available mortgages for first-time buyers.

"This announcement will go some way to alleviating this problem and introduce some liquidity into the housing market here.

"This is a positive step that the Executive fully supports, we hope that other banks will consider similar measures to improve the prospects for first time buyers."

Also commenting, Mr McGuinness said: "The First Minister and I are determined to tackle the challenges of rising costs.

"We will be meeting with various sectors such as the financial institutions, food retailers, energy suppliers and vulnerable consumers over the coming months to listen to their concerns and encourage them to bring forward further initiatives.

"Today's announcement should make obtaining a home easier for a number of first time buyers at this difficult time."

Launching the scheme, Ulster Bank Head of Mortgages, Derek Wilson, said earlier that the initiative is a major innovation, designed to support first time buyers in current housing market conditions.

"First time buyer levels remain low in Northern Ireland, despite asking prices for properties having been reduced significantly in many areas during recent months.

"This product has been specially designed to provide first time buyers with additional protection against house price volatility and to allow them to purchase without having to fund a deposit themselves - two of the main deterrents for first time buyers.

"A steady supply of first time buyers entering the housing market is vitally important, therefore by supporting first time buyers, this product offers resulting benefits to the market as a whole," Mr Wilson added.

The news is set to be welcomed by thousands of potential first time buyers across the Province, who have seen prices drop, but are at the same time faced with the availability of affordable mortgage offers withering.

The reduction in 100% mortgage deals has meant many buyers have needed to seek out extra finances to stump-up huge deposits.

(PR/NS)