The Government has decided to scrap its Help to Buy mortgage guarantee scheme. The programme will close to new mortgages on 31st December 2016, Chancellor Philip Hammond has confirmed.
The news arrives following research by online estate agent eMoov.co.uk that found that house prices in almost half of England will be too expensive for buyers to purchase a property through the Help to Buy ISA scheme by spring 2017.
Government Decides to Scrap the Help to Buy Scheme
The agent analysed the average house prices across all 326 districts in England, finding that prices in almost half of the country will exceed the Help to Buy threshold by March next year.
The Founder and CEO of eMoov, Russell Quirk, comments on the Government’s decision to scrap the Help to Buy mortgage guarantee scheme: “Big development for those looking to get that vital first foot on a rather high UK property ladder.
“On the face of it, it might seem like bad news for would-be homeowners, however, the failure of the Help to Buy scheme has been pretty monumental in addressing the growing housing crisis.”
He continues: “Today’s announcement by Philip Hammond marks a significant change in the ideology of this new Prime Minister and her Government – an ideology that clearly does not share the Cameron/Osborne love affair with aspirational homeownership.
“This complete reversal could be seen as a real retrograde step and now leaves several hundred thousand would-be homebuyers that could benefit from the Help to Buy scheme, particularly those first time buyers, without the assisted first rung of the property ladder to step on.”
Quirk explains his expectations: “I suspect that the direction of travel for the Prime Minister is to now promote build-to-let, which is an easier win than chasing ever higher house prices. Although it will be seen as an attack on those looking to buy in an ever inflated market, the Government’s record of actually building new property has been less than woeful, and so any attempt to address the shortage of property stock should be commended at the very least.
“If we do see this supply and demand imbalance start to level out, prices will follow suit, resulting in a more realistic ask for those looking to buy.”
With the Help to Buy mortgage guarantee scheme set to be no more in a matter of months, will private tenants be forced to rent for even longer? While this might be good news for landlords, it is always important to remember to stick to the law in order to protect your renters!
Keep up to date with your responsibilities at Landlord News.
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