Calls for politicians to clarify what will follow Help to Buy - Royds Withy King Solicitors

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15 April 2015 0 Comments
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Calls for politicians to clarify what will follow Help to Buy

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Mortgage lenders have urged the Government to find a replacement for the help-to-buy scheme before it comes to an end next year. Many in the industry have credited the initiative with driving up competition and fear that first-time buyers will …

Mortgage lenders have urged the Government to find a replacement for the help-to-buy scheme before it comes to an end next year.

Many in the industry have credited the initiative with driving up competition and fear that first-time buyers will suffer if something similar doesn’t succeed it.

Ministers have committed to continue help-to-buy for new-build properties for another five years, but for the most part the measures introduced to kick start the housing market will end next year.

The  Intermediary Mortgage Lenders Association said last month that almost two thirds of its members are concerned that competition could tail off, posing new challenges for people looking to get their foot on the property ladder.

Peter Williams, executive director of IMLA, said: “The help-to-buy mortgage guarantee has breathed new life into the market and opened the door to more prospective homeowners without sacrificing standards when it comes to affordability checks.

“It is encouraging to see more lenders offering 95 per cent LTV products outside of the scheme – but it would be a big gamble to rely on this continuing without the boost that the government has brought to the first-time buyer market.”

The need for reassurances has been reinforced by new figures from the housing charity Shelter, which showed that the gap between earnings and the cost of a starter home has grown massively in recent years.

Shelter claims that if property prices had risen in line with earnings between 1969 and 2013, the average cost of a home in England would have grown to £121,166. In actual fact it is almost £77,000 more, with the typical home on the market for £198,039.

The Government has maintained it is committed to helping people get on the property ladder, last month announcing a help-to-buy ISA in the Budget.

At Royds, our residential property team has a wealth of experience handling transactions around London and further afield. For more information on the services we provide, please contact Relf Clark or visit our website.

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