The proposed ‘Help to Buy’ scheme seems to be causing quite a stir in the housing industry, home prices in some areas of the UK have already started to increase beyond expectation, in just the midst of the new deposit guarantee scheme due to be released until next year.
The proposal for the ‘Help to Buy’ scheme, which is going to supersede the existing scheme FirstBuy for deposit loans for new build property, sent Barratt shares rising just after the announcement.
The new scheme is not only aimed at first-time buyers but will also give existing home owners the chance to tap into finance for a large deposit of 20% for a bigger loan, and it will be backed by £130bn of government funding.
However the ‘Help to Buy’ scheme has caused quite a bit of controversy. The IMF, The International Monetary Fund, have stated that the new scheme will boost demand, but not necessarily supply. A housing shortage continues to be a problem with the UK, so that even when people can access higher LTV mortgages, it might not necessarily mean that they will be able to get onto the property ladder.
Home building in the UK is at its lowest since the 1980’s, with many land owners keeping land so that it increases in value, but the government have said that they will try to make keeping hold of land less fiscally appealing. There is a huge amount of building land available in London, but landowners are reluctant to sell or develop it.
However Stuart Baseley, the executive chairman for the Home Builders Federation stated that: “At a time when government is looking to increase supply, the suggestion of a tax on land is flawed,” he said. “Generally when developers are holding permissioned land it is because the site is not viable or they are unable to secure development finance, so taxing it would make it even less likely to be developed.” He also indicated that the Office for Fair trading also could not back up these claims of unnecessary land holding.
If you are looking to buy a property or move up into a larger home and need some advice, then why not contact Enable Independent your approachable independent advisors. It’s our job to make sure that we keep up to date with the most recent changes to legislation and we have access to mortgages across the market place.
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