Liquid error: wrong number of arguments (2 for 1) Help to Buy will boost sales not prices, predicts agent | Marsh & Parsons Sales and Lettings Estate Agents London

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Help to Buy will boost sales not prices, predicts agent

Mon 07 Oct 2013

The 12 billion scheme, designed to help home buyers purchase property without having to pay the whole

deposit, opened for business today, with high street banks including Natwest, Halifax, RBS and Bank of Scotland

all offering Help to Buy mortgages.

Virgin Money has also confirmed that they will participate in the scheme next year, alongside Aldermore Bank.

The scheme uses government-backed loans to help people frozen out of the housing market because they cannot

afford large deposits. Valid on new and existing homes worth up to 600,000 the mortgages will cover up to 95

per cent of the propertys value, meaning that buyers will only need a deposit of as little as 5 per cent.

Too many hardworking people are finding it impossible to buy their own home - people who can afford the

monthly mortgage payments but havent got rich parents and cant pay the deposit up front, said Prime Minister

David Cameron.

Our Help to Buy Equity Loans, have already helped over 15000 people buy a new home. But weve got to go

further and finish the job weve started, he continued. There is a need for Government to act.

Reaction the scheme has been mixed since its original introduction earlier this year, with experts such as the

Royal Institution of Chartered Surveyors arguing that the programme will only help to fuel a housing bubble in the

UK. Indeed, with the country facing a severe housing shortage and the scheme encouraging more people to buy,

pressure is likely to push rising property prices up even higher.

The governments surprise decision to bring Help to Buys phase two (which has opened the scheme up to include

existing homes as well as new build homes) forward by three months to today has therefore prompted even more

concerns from some parties.

Peter Rollings, CEO of Marsh & Parsons told TheMoveChannel.com: The bringing forward of the Help to Buy

scheme is certainly encouraging politically charged tit-for-tat with more spin than Shane Warne in his prime. But

the scheme will help to stimulate the UK housing market over the short term like a shot of adrenalin.

Outside London the market desperately needs this impetus as prices have risen anaemically for some time but

in real terms they havent risen for a number of years. But in London over the last 12 months we have seen price

increases of between 10%-15%.

Yet the capital needs this stimulus to free up mid-ladder buyers who want to become first time sellers. This will

create a much healthier balance between supply and demand and its these buyers who need help to meet often

stringent lending criteria of the banks. The agent says that while Help to Buy will undoubtedly continue to help

first time buyers, it will also encourage second steppers to sell their homes and find their own existing properties.

This effect will ripple up the housing ladder, helping to ease the log jam resulting from a shortage of property to

sell.

If this is true, haart suggests, then the housing bubble some fear is on the horizon will actually be avoided by Help

to Buy.

Paul Smith, CEO of the agency, tells TheMoveChannel.com: We predict that property transactions will rise by

10-15% over the next 12 months, which will moderate the current excess demand in the market, taking the

pressure off house prices. We see house prices rising only moderately in the coming

months.

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