NEWS | Sunday, 26 August 2007

MLP proposes schemes to aid first-time buyers

Bianca Caruana

The leader of the Labour Party, Dr Alfred Sant, has put forward a list of proposals aimed to aid young couples intending to buy their first home.
The cost of property has been identified as a cause of problems for couples, and the initiative is expected to be taken up by the Housing Authority to facilitate first-time buyers allowing easier purchase of properties.
Developers are expected to offer adequate housing for families at competitive rates, which can also be afforded by young couples. The price of these homes is not to exceed Lm50,000 and should be ready for first-time buyers to live in comfort.
The government will be responsible for sustaining a fund, projected as one of the schemes to aid couples by offering grants of a limited amount to those in need. These grants will not exceed 10 per cent of the price of the property. There will not be any means-testing to qualify for this grant and it will be available to anyone buying their first home.
The amount given to the couples in funding will be repaid if the same property is sold at a future date, with interest according to the current rates provided by the bank. All refunds will be returned to the same fund to be used again so as to eventually become self-financed.
The second scheme will be aimed at the rate of interest, which constantly fluctuates and has been considered problematic for young couples. In an attempt to give young couples and first-time home buyers an opportunity to comfortably plan the purchase of a house, the Labour Party is proposing to have interest rates capped for first-time buyers to no more than a bank rate (as opposed to the base rate) of 4.5 per cent. This will apply for the first seven years of the loan, if one has been taken out, and can also be applied to families already in possession of their first property.
The ceiling stamp duty of a 3.5 per cent rate of the first property bought, will be raised from the first Lm30,000 to Lm50,000 of the overall price of the purchase.
The final scheme proposed is aimed at people who have been made redundant. The current situation allows the payment of the interest alone. The Labour property scheme is proposing a grace period whereby people do not have to pay anything during the period of redundancy. Once employment has been gained, payment of loans and interest will resume as before.

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