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A new survey by Rightmove has found that around one-third of 44,000 potential homebuyers questioned felt confused by the government’s Help to Buy scheme.
The scheme offers first-time buyers help to get on the property ladder if they buy a newbuild. First-time buyers with deposits as low as 5% of the property’s asking price can take advantage of the government-backed scheme, the first phase of which comprised an equity loan, while the second – launched in October – underwrites part of the mortgage.
Help to Buy can also help existing homeowners who want to move either to a newbuild or an older property.
Researchers found 23% of those questioned thought only newbuild properties were eligible for Help to Buy, while 34% thought the second phase merely extended the equity loan phase. A total of 42% thought the Help to Buy second phase was also only for first-time buyers.
Help to Buy was launched to boost the property market and enable existing homebuyers to move up to a better property, as well as enabling new homeowners secure their first home.
Critics have said that Help to Buy may encourage people to extend themselves financially beyond what they can afford, as properties up to £600,000 are eligible under the Help to Buy scheme.
There are fears that a resultant property bubble could also lead to a collapse in house prices and rising mortgage interest repayment rates, with many homeowners potentially losing their homes.
This in turn could place strain on local authorities if homeowners and families become homeless and apply for local authority housing.
Duncan Lewis Housing Solicitors
Duncan Lewis is one of the UK’s leading firms of housing solicitors and can advise on mortgage repossessions and debt, as well as a wide range of landlord and tenant legal matters concerning Local Authority or rental properties, including:
• Housing possession
• Disrepair of rented property
• Housing benefits
• Landlord and tenant disputes
• Unlawful eviction.
Contact Duncan Lewis housing solicitors on 020 7923 4020.