Posted on 4.4.16 by Matthew Owen
The Help to Buy government scheme was first introduced in 2013 with the main aim of helping first time buyers onto the property market. Since its inception over 150,000 completions have taken place with 80% of these being made by first time buyers. This means that around 118,000 first homes have been purchased with Help to Buy assistance.
At Gorvins we have noticed a surge in first time buyer enquiries of 39%, demonstrating that the scheme really is helping people to buy their first property. Interestingly, the North West region has the highest number of homes bought through the mortgage guarantee scheme.
Initially, two strands of the Help to Buy scheme were launched: equity loan and mortgage guarantee. Since then other threads have been brought under the Help to Buy umbrella, including; Shared Ownership (which was already available in the UK via housing associations) and Right to Buy which was introduced in the 1980s.
More recently, the Help to Buy ISA has been unveiled by the government and has already been taken advantage of by many budding first time buyers; some 250,000 have opened an account since December 2015, which shows the eagerness of many to get onto the ladder. Our Residential Property team have already completed many transactions where the Help to Buy ISA has been used despite its infancy.
To read more about the Help to Buy ISA, see NatWest’s very helpful infographic.
Advantage for First Time Buyers as Stamp Duty changes come into effect
There has been an ongoing battle in recent times between Buy-to-Let investors and first time buyers, with both vying for the same properties. With so much demand for property but so little supply, prices have gone through the roof, pricing many first time buyers out of the market and paving the way for more buy-to-let investment. This has created somewhat of positive feedback loop for investors and as a result there has now been something of a reported onslaught from the government against landlords. The biggest change is that from the 1st April 2016 those purchasing another property are subject to pay an additional 3% of stamp duty land tax. It’s now also come to light that new UK buy-to-let landlords may be subject to tougher mortgage affordability tests.
Just before the deadline date, we noticed a huge uptake of investors buying property before they would be charged a lot more. We don’t know the effect that the changes will have in the future, but most of the sector is expecting a slow-down from investors purchasing further properties until they have assessed their finances and the impact of other changes. In the meantime, it’s expected that this will result in less competition for those who aren’t already on the market.
How Gorvins can help
Buying a house for the first time can be exciting, daunting and confusing all at the same time. That’s why you need to put your trust into safe hands. We want to help you make a smooth transition to your new home. We have also developed our own First Time Buyers Guide.
If you are in the position to buy your first home and would like to deal with an experienced and professional law firm, call us on 0343 507 5151 for a free, no-obligation conveyancing quote. We will give you the facts and figures and a complete breakdown of the costs that we have quoted; nothing is hidden from you. You can also fill in our online form with the details of the property and one of our helpful staff will be in touch.