Posts tagged ‘first time buyers’
Home buyers using the Help to Buy scheme are being given a foot up the property ladder to the tune of £600m, despite growing concerns about a house price bubble.
The latest figures from the Government, published today, show the true extent of how the taxpayer is subsidizing the scheme and has led to concerns it is fuelling the increase in house prices.
Help to Buy was launched amid a fanfare by Chancellor George Osborne almost a year ago in the last Budget to help those with a small deposit to buy a home.
But the popularity of the equity loan scheme, which includes an interest free loan of up to 20 per cent of the value of a property, comes amid fears about the property market overheating.
The cash means home buyers can purchase higher priced properties they may not otherwise be able to afford, and mortgage experts suggest the taxpayers’ funds may be better spent elsewhere.
Jonathan Harris, of mortgage brokers Anderson Harris, said: “It is crystal clear how important the housing market is to the overall economic health of the country when the Government is handing out such significant subsidies to buyers.
“The idea is that we all benefit when the housing market is operating efficiently, with the knock-on effect being felt by estate agents, mortgage brokers, surveyors, solicitors, lenders, builders, and removals firms.
“However, £600m is a lot of money and one wonders whether it could be better spent elsewhere.
“The Government might be better off ensuring that enough homes are built to keep properties at realistic price levels rather than further fuelling house-price inflation in this way.”
A total of 14,823 properties were bought during the first 10 months of Help to Buy equity loans, according to the Department for Communities and Local Government.
The average price of a home purchased under the scheme was £184,000 , with the average equity loan of £36,599.
The majority of home purchases in the Help to Buy equity loan scheme were made by first time buyers, accounting for 89 per cent of total purchases.
The figures do not include the Government’s second phase of Help to Buy, which was launched at the beginning of October last year, with the mortgage guarantees coming into force at the start of this year.