Saturday, 21 June 2014

Help to buy scheme may house some problems for potential home owners

Cautious signs that the economy is on the up are starting to show, there is a feel of optimism in the air that even the performance of the England football team cannot diminish. There is movement in the housing market, and even on a local basis, more and more “sold” signs have been replacing the “for sale” ones, which have been there for so long it seemed as if they had taken root. Estate agents are definitely amongst the movers not shirkers of the work force and particularly busy in the North and the Midlands where up to 13,000 home buyers have taken advantage of the governments “Help to Buy Scheme”.
MP's warn of risks to government's home loan project
This has been a scheme aimed at those who can afford to pay a mortgage but the sticking point to getting onto the housing ladder has been the deposit. If the property is a new build, and costs less than £600k, providing the buyer has 5% of the deposit, they can apply for the government loan worth 20% of the purchase price. The good news is that for the first five years, this loan is interest free so a win-win situation all around you would think. However, some doubts have been raised by the recent Public Accounts Committee report, as MP’s warn the Help to Buy scheme is creating medium and long term risks for the taxpayer. Value for money has also been brought to bear, along with the toll of the administration burden placed on the government who are managing this scheme.
Consumers could have been offered more viable schemes
The Chair of the Committee has also raised the question of whether the government looked into other viable schemes for consumers before going ahead with this one and said that, as there was the potential for more viable schemes, the government could have, in her words, carried out a “violation of Treasury guidelines.”
On the face of it this seems to be a scheme that can help get people get a foothold on the property ladder, although there was the hope that it would encourage new house-building in the South East of the country, so far over 13,000 people have managed to buy their house. Housing Minister Kris Hopkins has rejected the report because he feels it has managed to give a boost to the economy. He has pointed out that as a Labour party member, Margaret Hodge who chairs the Public Accounts Committee, is “grandstanding” and “political point-scoring.”

It seems a pity that the MP’s can’t leave any potential point-scoring to our national sports teams and current Wimbledon champion, in the next few months, and concentrate on pulling together to continue to steer this country out of its current economic downturn. If you have been one of the many who bought into the Help to Buy scheme, let us know your opinion of how it has worked for you – we’re listening!


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