A Helping hand to Essex’s property market
The introduction of the Government’s mortgage guarantee scheme to the second hand market this month will help those with just a 5% deposit to buy a home. The initiative is making national headlines and, while it has its critics, Beresfords believes it will be crucial in easing an impending gridlock in property chains across the county.
Beresfords has seen the number of first time buyers registering since the start of the year soar by nearly a quarter (24.3%) when compared to the same period last year. As with the rest of the country, this level of demand is not being met with supply and the introduction of Help to Buy would allow second steppers to move and release the properties at the start of the ladder for first time buyers.
Paul Beresford, Managing Director of Beresfords, comments: “Second steppers have been hit hard by the recession, including substantial stamp duty tax rises when they move up the ladder - which jumps from 1% to 3% of the total value of the property on properties above £250,000.
“As a result, many second steppers have been unable or reluctant to move and this has prevented their properties from being fed back into the property chain for the growing number of first time buyers. Help to Buy will provide a life-line to these homeowners because they will not require a large deposit to get an attractive mortgage and will have the financial capacity to deal with increases to stamp duty and moving costs.
“What we really need to do is address the chronic issue of supply by focusing on building more houses to meet demand which in itself would keep prices in check. There are plenty of brownfield sites and others with non-conforming use that can be developed and the Government’s own figures show that we need to build not far short of 250,000 homes each year to meet demand. At present we are building less than half that number. In fact the last time we got to that volume was 35 years ago!”
For further information on the Help to Buy scheme please contact your local office.