By Martin Williamson, Head of Residential Property, Latimer Hinks Solicitors
Since its introduction last April, the Government's controversial Help to Buy scheme has been the focus whenever the term housing bubble is mentioned. Nevertheless, its success must not be ignored.
A Help to Buy equity loan sees the Government lend you up to 20% of the cost of a new-build home, meaning buyers will only require a five per cent cash deposit and a 75% mortgage to make up the rest on properties up to the value of £600,000.
The latest government statistics have revealed that more than 17,000 homes have been bought under the scheme, with 80% being first-time buyers. However, 77% of these properties were purchased outside of London, which only fuels the hype surrounding the North-South divide.
A fifth of all homes built since April 2013 have been sold through Help to Buy, according to Countrywide - the UK's largest listed estate agent - with half of new home sales in the North sold through the scheme. County Durham alone saw 167 sales. The regions beleaguered housing market, which is well below pre-recessionary levels, has received a boost in house building activity.
The second phase of Help to Buy, which launched in October, is a much broader scheme that applies to second-hand properties, as well as new-builds. The Government does not lend money to the homebuyer, but it does guarantee up to 15% of the loan, allowing for borrowers with a five per cent deposit more of a choice on mortgages.
Help to Buy is playing its role in rejuvenating the economy and getting people onto the housing ladder, as well as moving up it. House building demand is on the rise and the challenge will be maintaining momentum, but with an extension of the scheme to 2020, this all bodes well for the future.
Please note: This article is intended as guidance only and does not constitute advice, financial or otherwise. No responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by Latimer Hinks. In addition, no responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by the firm.
Martin Williamson is Head of Residential Property at Latimer Hinks Solicitors in Darlington. Latimer Hinks has a team of around 40 people serving private and corporate clients. For further information: www.latimerhinks.co.uk or call 01325 341500.