Tuesday, 8 October 2013

Property scheme is not all good news

One of our partners has hit out at a new scheme designed to help first time buyers get their foot on the property ladder. Nita Patel is head of the property team at our headquarters in Euston Way, Telford.

She said the news that the Government had brought forward the launch date for the Help to Buy scheme had been welcomed by many people as it would not only help first time buyers, but also people looking to move up the property ladder.

“Initially it had been planned to launch the scheme in January 2014, but the launch was brought forward which has been declared a positive move by many. But although the scheme will help buyers to purchase a property with as little as five per cent deposit, it’s clear that it just hasn’t been thought through as well as it could have been.”

Nita said the concept of the scheme was good, as at a time when the property market was recovering first-time buyers needed all the help they could get.

“It’s a great idea to help first-time buyers who don’t have rich parents to help them with their deposit so that they can buy a new home. But it fails to tackle the real problem, which is a lack of house building across the UK.

“The scheme will inflate house prices even more, which will just make properties even more unaffordable for generations to come. And another issue is that solicitors will probably have to charge additional fees for dealing with the extra paperwork that will be created as a result of the changes.

“I believe it’s maybe been created as a quick-fix and that it’s been developed so that the Government is seen to be doing something to help struggling first-time buyers. It would have been better to delay the launch as they had originally planned in order to iron out some of these issues and to pin down the finer details of the scheme before it was opened to the public.”

The Help to Buy scheme applies to all properties up to a value of £600,000, and involves the Government making a loan of up to 20 per cent of the cost of the new-build home. Buyers can then secure a deal with a deposit of as little as five per cent, and a 75 per cent mortgage to make up the rest of the cost.