More than 100,000 homes have been bought through the Government’s Help to Buy scheme, the BBC reports.
Since the project was launched in 2013, buyers of new-build properties have been able to borrow up to 20% of the cost from the Government, meaning that people could bag a home with as little as 5% deposit (taking a mortgage to cover the rest).
Where the scheme differs from conventional lending is that there are no fees on the Government loan for the first five years, allowing buyers to establish themselves comfortably before beginning to repay it.
Incredibly, a third of new builds outside of London between April 2013 and April 2016 were purchased through Help to Buy. This indicates a rip-roaring success for the Government.
Interestingly, though, the scheme is doing less well in London itself, with only one in three new-build buyers in the capital taking the loan – even though the rules were changed for London-based purchases last year, allowing up to 40% to be borrowed from the Government. It could be that the costs in London simply remain too high for young people and first-time buyers to afford, even with a loan incentive.
Even with the success of the scheme in other parts of the country, critics have also warned that, although there is currently no end date for Help to Buy, the fallout when it does finish could be severe.
As Roger Harding, director of communications, policy and campaigns at Shelter, said, ‘While a Help To Buy equity loan might help some first-time buyers on to the ladder, in the short-term there is a risk it will push up house prices making it even tougher for others to buy a home in the future.
‘If the government really wants to tackle our housing shortage, its best bet is to start with building homes that are genuinely affordable for people on low to average incomes to buy and rent long-term’.
Despite the pessimism of some, it seems that Help to Buy is doing its job: assisting first-time buyers with climbing the property ladder. Indeed, 81% of those who have taken up the scheme so far have been purchasing first homes.
Many new homeowners have found that the loan supplied with Help to Buy has allowed them to pay less each month for their new properties than they would have done renting.
Where further input is needed, then, is in the supply of affordable housing to make sure that the nation’s young people can afford their own homes both now and in years to come.
Are you looking to move into your first property? With over twenty years of experience, Julie Twist Properties has the expertise to help you find your new home, or need help in finding a mortgage call 0161 834 8486 or email firstname.lastname@example.org.
Posted by Laura on December 19th, 2014
Posted by Laura on May 1st, 2015
Posted by Stacie on March 10th, 2015