The scheme allows people in the capital to put down a 5% deposit to gain an interest-free loan of up to 40% of the property’s value from the government, with a mortgage of up to 55% of the value covering the rest.
Leeds which is set to offer the scheme alongside other lenders including Nationwide and Lloyds Banking Group, said: “We are committed to supporting this important Government initiative, which makes Help to Buy (HTB) a practical solution in London, where the average house price is almost 18 times the average salary,” said Martin Richardson, Leeds Building Society’s director of business development.
“Affordable housing in London has typically relied on shared ownership and Help to Buy London complements our extensive range of shared ownership mortgages, providing additional choice for consumers.”
According to the ONS House Price Index, the average house price in London in October was £531,000 against an average salary of £29,868.80.
Help to Buy: Equity Loans are already available to first-time buyers and home movers in England on homes worth up to £600,000. If borrowers can find a 5% deposit, the government is willing to lend an interest-free loan of up to 20%, if the borrower can get a mortgage of 75%. This scheme is expected to be available until 2021.
Other government initiatives announced in the Spending Review and Autumn Statement include relaxation of the Shared Home Ownership purchase rules from April this year. The government is also spending £2.3bn on the Starter Homes Initiative, which offers a 20% discount from the market price of selected new-build homes.
Finally, the contentious extension of the Right to Buy scheme to Local housing association tenants starts in 2016 with pilot schemes beginning shortly.