December 2nd, 2014
Prime Minister David Cameron says that the much heralded ‘Help to Buy’ scheme is a success, as he revealed that over 70,000 people have now benefitted from it.
Government figures released this week show that First Time Buyers, who ‘Help to Buy’ was originally intended to aid, are reaping the benefits, making up 81% of purchases under the scheme.
"Help to Buy has helped thousands of hard-working people buy a new home and enjoy the security and peace of mind that comes with that” said the PM.
“Crucially, it's playing a major part in increasing the number of new homes being built around the country – creating jobs and investing in communities. This is all part of our long-term economic plan to secure a better future for Britain."
The total value of mortgage funding supported by the scheme now sits just below £12bn, and there is further proof that the scheme is helping the right people, says one industry expert.
“The statistics released to the end of Q3 show that the overwhelming majority of people using Help to Buy are first time buyers, and that fears of an artificial housing bubble have proved unfounded” says Taj Kang, Business Development Director of specialist broker Contractor Mortgages Made Easy.
“The average house value mortgaged with Help to Buy is £186,000 – nearly £100,000 less than the national average house price of £273,000. This certainly supports the Government view that the scheme has been administered responsibly.”
The news comes amid market data showing a distinct cooling of the property market in October, with mortgage approvals falling for the fourth consecutive month, according to figures released by the Bank of England.
A total of 99,707 mortgages were approved in October 2014, down 14% from the same month last year, though the value of approvals – £15.3bn – only fell 7% from the previous October, due to an increase in property prices.
There is, however, an underlying reason for caution in the market, as Peter Rollings, chief executive of London-based estate agents Marsh & Parsons, suggests.
"Fears of a potential mansion tax could contaminate demand for prime property in the run-up to the general election. Uncertainty surrounding this and the possibility of other populist wealth taxes is putting off all buyers be they overseas or home grown, for whom Prime London property usually commands global appeal as a gold-standard asset.
"This could be a worrying development for London's reputation as a business hub and natural outlet for investment, and could spell trouble beyond the capital if this lack of confidence at the highest rungs trickles down the housing ladder to the wider market. It is safe to say that ears will be pricked during Osborne's Autumn Statement next week, and all parties need to be wary of quashing the intrinsic momentum of the property market."
Article By: Mark McBurney, Senior Mortgage Consultant at Contractor Mortgages Made Easy
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