2nd December 2013
The vast majority of estate agents forecast that the Government’s so-called Help-to-Buy scheme will boost home sales by almost a third in the UK.
According to research from independent estate agency network, Move with Us, some 85% of agents believe sales will rocket by 30% as a result of the initiative, which is aimed at those who can afford mortgage repayments but are struggling to raise an adequate deposit.
The results, unsurprisingly, showed that the majority of estate agents support the Help to Buy scheme and expect that it will help further stimulate the property market.
Help-to-Buy was established by the Government in a bid to give those struggling to get on the housing ladder a leg-up.
Under this system, would-be property owners can put down a deposit as small as 5% for homes up to a value of £600,000. Mortgage lenders who sign up to the scheme, pay a fee to the government, which will in turn guarantee 15% of the loan value.
The first phase of the plan started in April in England. When estate agents were asked by Move with Us, if they believe it was right to bring the Help to Buy scheme forward from January 2014 to October 2013, 86% of agents agreed that this was a good policy decision. A further 77% think the scheme will help increase sales during the typically quiet period in the housing market in the run up to Christmas.
Robin King, director at Move with Us, says: “Estate agents predict positive sales figures in response to the Help to Buy scheme but we are still waiting to see the overwhelming flooding of the market that some news reports anticipated. This could be down to the restricted lender participation in the scheme to date.
“House prices are increasing naturally as we would expect in a recovering economy and it is likely the Help to Buy scheme will have a positive impact on property prices, generating more sales and creating more fluidity in the market. As a result, we expect to see an increase in house price values of between 5% and 8% in some regions as we enter 2014, however, this will be very much dependent on the banks’ ability to lend on mortgages and to fulfil their commitments to government schemes.”
However Bank of England governor Mark Carney believes that the housing market has been provided with enough stimuli so far and announced last week that another scheme Funding for Lending, which was launched in 2012 to give banks cheap access to cash to encourage lending to households and businesses, would be scaled back and be targeted just at businesses.
According to Nationwide’s latest figures.UK house prices enjoyed their highest rates of growth in three years with prices up almost 7% in the past 12 months.