I was interested to see the
efforts made by the government this week to move our stalling economy. The existing FirstBuy scheme, which was
originally aimed at first-time buyers, will be extended to include anyone wishing
to buy a new-build home.
The “Help to Buy” scheme,
which launches on 1 April, will provide shared equity loans of 20% of the
property price if purchasers put down a 5% deposit from their own savings. This
is much lower than the deposits currently required by banks.
New-build homes must not
exceed £600,000 in value in order to qualify for the loans, which will be
interest-free for the first five years.
There will also be a new
mortgage guarantee, designed to increase the availability of loans to
purchasers, which extends the NewBuy Guarantee scheme to include older
houses as well as new-builds. Starting in 2014, the scheme will run for
three years and will support £130 billion of mortgages. This is particularly interesting. The
question that leaps to my mind is “are we in for another property boom
then? Will we see a huge surge in the
housing market?” This attempt to “kick start” the population’s ability to buy
new build properties will undoubtedly improve the construction industry which
has (dare I say it) been damaged the most in this recession. I can see it resulting in the further
building of properties and the employment of many tradesmen who appear to have
suffered most from the particularly grave consequences of this country’s
economic downturn. However, is a
property boom really what we all want after what happened to us last time
around? Is this country capable of
anything other than “boom” and “bust”?
We’ll see.
My prediction is that we will
see the property market begin to pick up because of this scheme. However, at the end of the 3 years are we
destined to plummet to the back of beyond again? This remains to be seen. Some may say that the population has become
too cynical to risk taking the plunge now.
However, with rental properties having become so expensive and people
having waited for years and years to buy property at the “right price” from
last time around, there are a lot of people out there just waiting for
something like this to happen.
So, on the face of it, this
looks like excellent news for all those people who have been desperately trying
to raise the stupidly high deposits often required by banks or other lenders.
If the measures work in the way that the Government says it intends, this
should mean that more people are now able to realise their dream of buying
their own property. I am all for that!
Here’s to us taking the next
plunge into the unknown!
(....and let us hope we are
not in the same position, as we are in now, in another few years).
