Thousands use Help to Buy scheme
Around 4,000 people have reserved a new home using the Help to Buy scheme in the two months since it was launched.
Help to Buy currently offers purchasers of new-build homes access to 95% mortgages, with taxpayers funding a 20% share.
According to the Home Builders Federation, demand for the shared equity loan scheme has been such that developers will now be able to increase their output significantly.
The executive chairman at the HBF said: “The equity loan part of Help to Buy has got off to a flying start. It has been an unqualified success so far and 4,000 reservations in just two months show both the consumer demand for the scheme and developers’ commitment to it.
The large deposits required in recent years to secure a mortgage have prevented many from buying – and as a result, builders from building. The equity loan scheme helps consumers overcome that deposit barrier and as a result the scheme will undoubtedly lead to an increase in house building. This in turn will create jobs and deliver an economic boost.
The second part of Help to Buy is due to kick in next January and will offer mortgage guarantees to those with only a 5% deposit. The Government expects this part of Help to Buy, which will apply to both new and second hand homes, to generate 190,000 sales a year.
However, there has been criticism that not enough information has been released by the Government and further clarity is required in order for homebuyers, the building industry and the property professions to plan and prepare. There has also been comment from some sources within the industry that it might not happen at all or if it does, the result will be further property inflation and it may become counter productive. We all await further comment and information.
The National Association of Estate Agents, of which we are a member, has yet to express its views, although its members will be in the front line of events when it launches in just over six months’ time.