September, 2016
There has been some criticism levelled at the Government’s Help to Buy scheme which has been revealed to not actually help first time buyers until after they have paid for their new home themselves, somewhat voiding the ‘help’ they were supposed to be receiving in the first place. Some industry experts have even labelled the scheme as a ‘deception’.
It was originally thought that the scheme would provide, in advance of the actual sale, a percentage of the deposit required to secure the deal on a property being bought by people buying their first home. However, the small print of the scheme has revealed that the percentage to be paid by the Government will not actually be provided until after the house purchase has been paid for. This means first time buyers are back to square one in terms of saving up the deposit needed to buy their first property.
Lack of Transparency is a ‘Deception’
With the average deposit around the UK standing at about £15,000, the Government’s Help to Buy scheme seemed to be promising to pay £3,000 of that to help the first time buyers get on to the property ladder without saving up the full amount. However, it now appears that even by taking out the ISA – which approximately 500,000 people already have – first time buyers will still be struggling to save up the full deposit. This has drawn criticism as the scheme is clearly not doing the thing that saw it be so well received by many people in the housing market last year.
Some industry experts have had their say on the emergence of the fine print detail of the scheme, with the Managing Director of the National Association of Estate Agents (NAEA), Mark Hayward, identifying the previous lack of clarity on the matter as being unfair on many people who have been saving up for their first homes.
Hayward said, “Consumers have been putting money aside on the basis that they believed it would be applied to their deposit on a new home. To now clarify that it is not actually available until completion is the perfect example of a painful lack of transparency and frankly nothing short of deception.”
Scheme Could Even Hurt Uninformed First Time Buyers
NAEA’s MD, Mark Hayward, continued, “First time buyers are already struggling with getting on to the housing ladder and this much hyped initiative was welcomed at the time as a way of helping them, but in fact could have ended up costing buyers if they have gone ahead with a purchase believing that the bonus counted towards the deposit.”
These details emerging now certainly do have the whiff of the Government promising one thing and then delivering another. The scheme was well received because it was a good idea that could help many people to get on to the property ladder. But now it’s been revealed as just a compensatory gesture – something that could actually be good in of itself – it has changed the game plan for a great many folks who were relying on the scheme to help with securing their deposits.
However, it should be kept in mind that with the promise of the extra deposit money eventually being refunded upon the purchase of the property, that should hopefully make it easier for first time buyers to gather the rest of the deposit together.
