Is Help to Buy working in Brighton and Hove?
Locally, in Brighton and Hove, we have a huge challenge with First Time Buyers accessing the Help to Buy scheme, given the cost of properties at the bottom of the ladder.
A typical one bedroom flat costs c. £170,000 but most FTBs want to step past that and buy a 2 bedroom...you're looking at something like a minimum £190K and easily £225K, as you get closer to the seafront.
So, on say £200K purchase, you put down your 5%, £10K, and get a mortgage on £190K. To do this, a couple earning £50K between them would be borrowing over 3.5 times income plus the deposit. Does it stack up and what happens if interest rates rise?
There is a real dilemma in the local market where, ethically, many people want young people to get onto the housing ladder, potentially having more long-term security than if they rent. But, if older people's future pensions are pushed down by low interest rates, they, with more money, can raise 'buy to let' mortgages and buy the properties at a level above what a FTB could afford...
This has been happening in Brighton and Hove for quite a few years already.
What are the long-term repurcussions?