Budget 2013 Will ‘Help to Buy’ really help in Brighton & Hove?
The Help to Buy scheme in yesterday’s budget is being promoted as an aid to buyers to get on or move up the housing ladder.
The issue in Brighton and Hove is that we have very little new build so anything which comes onto the market is not exactly ‘affordable’. So, if you stretch yourself, pay your 5% deposit, raise a mortgage for 75% of the purchase price and then get the 20% extra 5 year interest free loan, you then get the keys to your new home. The housebuilder gets their profit. Everyone is happy.
Five years on, you go to sell. According to the figures yesterday, we are still struggling as an economy till 2018. What price will you then sell for?
New homes are generally sold at premium prices and with a 20% subsidy on the purchase price to hold it up in the first place, you could in the future, have to sell for less than you paid. What happens to the outstanding loan if the sale price is less than the original purchase price? What happens if you have to sell after two years, and the sale price is less than the original purchase price? It’s not an easy decision to go for this scheme as it seems on the face of it.
It would be really useful if the Help to Buy scheme was available on all property transactions up to a certain price, say £500,000. It would encourage people to consider buying all kinds of property. This would boost the whole building trade, not just the large house building companies and it would move the general market forward. It would encourage sellers to market their property in the first place and so keep prices steady as there would be more property on the market.
Let’s see if the Government sweetens this offer.
Paul Bonett F.N.A.E.A. M.A.R.L.A.