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Help to Buy Holding Up the Housing Market
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The Government’s Help to Buy scheme has helped support the strength of the housing market, according to property experts.
Help to Buy Holding Up the Housing Market
In September, 2,252 buyers, mostly first timers, used the scheme, making it a record third quarter.
Buyers are given an interest-free loan to top up their deposits. This is financed by the taxpayer.
However, some believe that the popularity of Help to Buy could push house prices up in the future.
Ray Boulger, of John Charcol mortgage advisers, says: “Overall the proportion of sales accounted for by Help to Buy is 40% and on some building sites it is reaching 70%. That makes it massively important.”1
Since the scheme was introduced in early 2013, over 62,500 homes worth £13.6 billion have been bought with Help to Buy loans worth £2.7 billion, according to official data.
Ministers have noted that first time buyers made four out of five Help to Buy purchases, many of them at the lower-end of the property market.
However, LSL Property Services warns that Help to Buy and other schemes for first time buyers could cause house prices to soar.
The increase could arrive as buy-to-let landlords rush to purchase property before the 3% extra Stamp Duty rates come into force in April. Read more about the changes here: /16883-2/
LSL’s Adrian Gill comments: “There will be a growth in demand from both first time buyers with extra financial support and buy-to-let landlords hoping to invest before the tax changes come into force.”1
The Help to Buy Equity Loan for new build homes will continue until 2020, while Help to Buy Mortgage Guarantee, which helps buyers of new and existing properties, will end in a year’s time.
1 http://www.bbc.co.uk/news/business-35051348
