Budget 2013: What do brokers think?
Mortgage brokers believe that increased government support for home buyers is a significant step in moving the housing market forward.
Research from Savills has suggested that the incentive could support over half a million new home sales.
George Osborne outlined two key measures within the 2013 Budget to help get the stagnant property market moving again.
The Help to Buy scheme (basically an amended version of the previous New Buy scheme) will enable first-time buyers to put down a 5% deposit on a new-build property, with up to 20% of the value funded by a shared equity loan financed by the government – completely interest-free for the first five years.
Alongside this the government will introduce a new mortgage guarantee scheme, which will run for three years, supporting up to £130bn of mortgages for both new and old homes.
David Hollingworth, of London and Country Mortgages, was in support of the moves stating that they were a “significant step forward” for potential buyers.
Increase in house prices
There has been some criticism that the move would put taxpayers’ money at risk if new homeowners defaulted on repayments and also concerns that the new schemes would push up house prices – helping sellers but actually hindering their intended target.
Ray Boulger, of mortgage broker John Charcol, said that the policies could unclog some of the blockages in the housing market, but agreed that prices were more likely rise, by as much as 3% to 3.5% this year, rather than the expected 2%, as a result of the moves.