1. ITV Report

Chancellor's plan could help London's housing market

George Osborne with the Budget box in Downing Street. Photo: Lewis Whyld/PA Wire

London's homebuyers were given good news in the Budget as the Government announced plans to help the struggling house market and boost the construction industry.

Mayor Boris Johnson today said that construction firms needed encouragement to build more homes. The Chancellor George Osborne then announced a scheme that offers interest-free loans for those wanting to buy new-build homes.

Buyers who have a 5% deposit on the price of their new-build homes can apply for a Government loan worth another 20% of the cost. That means buyers will only need to find a mortgage worth 75% of the price from a bank or a building society. This scheme will kick in at the start of April and will last three years. However, it will only apply on homes worth up to £600,000.

The Chancellor announced a scheme offering loans to buy new-build homes. Credit: Dominic Lipinski/PA

The Chancellor also announced a mortgage guarantee scheme which applies to all homes. Buyers who have a 5% deposit can apply. They will still have to find a bank or building society to give them a loan on the rest but the guarantee should encourage lenders to offer mortgages at better rates. The scheme will start in January next year and will run for three years. Only homes under £600,000 are eligible.

There are more details available on the Treasury website.