Local Estate Agents give their views on the Help to Buy Scheme

Steve McCabe MP contacts estate agents in his constituency to find out what impact the government’s Help to Buy scheme is having locally.

The government recently introduced its Help to Buy scheme with the aim of enabling first time buyers to get their foot on the property ladder and boost the availability of 95% mortgages. The scheme works on the basis that first time buyers or existing homeowners can put forward a 5% deposit towards a property. This essentially means that buyers who take up the scheme are left with a 95% mortgage. The scheme applies to new build or existing properties worth up to £600,000. Since the scheme came into effect, over 1,000 people have made applications with 7.5% of those coming from the West Midlands, more than three quarters of applicants for the scheme are young first time buyers.

However, economists have expressed reservations about the government scheme claiming that it does little to boost house building, making demand greater than supply, and risking a surge in house prices. In the last six months, housing demand has increased by 10.2% and the average cost of a house has increased by 0.6%, making house prices 6.5% higher than last year. Lenders have predicted that the Help to Buy Scheme will inflate the housing market even further. Last week, Bank of England Governor, Mark Carney expressed concerns that the UK is heading towards a housing bubble.

Steve McCabe MP said:

“Whilst these figures reflect what is happening nationally, I am interested to hear what effect the scheme is having locally. Amid new concerns about the scheme and warnings that we may be heading towards a housing bubble, I am keen to find out what estate agents in my constituency think about impact of the Help to Buy scheme on the local housing market.”

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