Yorkshire’s newest online estate agent is urging home buyers to think carefully before jumping to capitalise on the second phase of the Government’s Help To Buy Scheme.
The wraps came off Westminster’s latest attempt to deliver CPR to the housing market this week, with the Treasury prepared to offer security of 15 per cent on any mortgage deal offered by lenders taking part.
In short, it means buyers looking for a house worth around £200,000 will need a deposit of around £10,000 – much less than the estimated 20 per cent of the property’s value, which has been the general yardstick since the financial crisis began in 2007.
However, esaleuk.com is warning prospective buyers not to be stampeded into buying and to ensure they consider all the financial implications before signing documents which could end up being a millstone around their necks – particularly if house prices drop again.
“The credit crunch began because people were borrowing beyond their means and, although the Government has stressed there will be stringent checks in place to ensure no one gets out of their depth, there is still a risk Help To Buy will be perceived as a transient thing.
“Like any short-term offer, if could push some to act in haste – and then repent at leisure.
“While there are too few new properties available to meet demand, the housing market is always going to be volatile and the judgement you have to make is whether Help to Buy is a long-term fix.
“After all, if a future Government decides to accelerate the house-building programme, prices could fall, leaving anyone who buys now at risk of finding themselves in negative equity.
“As estate agents, naturally, we want a vibrant market – but not at any price. Some form of control in the letting market, allowing tenants to save for a deposit, might have been a more long-term solution.
“But, now we have Help To Buy, our advice would be to consider it – but only if it allows buyers to get a foot on the right rung of the ladder and not one above what they can really afford.”