What’s up, Skint pals?
Hope you’re all doing well.
You might remember I wrote recently about the government’s new Help to Buy scheme, aimed at giving house-hunters looking to get onto the property ladder a chance to take out 95% mortgages. See, with lenders so scared of taking risks these days, first timers are struggling to get the sort of mortgages that they used to have access to – especially if they’re Skint in the City and trying to buy in an overcrowded, overpriced urban market. And with the cost of living rising too, and salaries still frozen like a duck pond in winter, it’s been tough for first time buyers to get a rung on the ladder at all in the last few years.
What’s the verdict?
So, now that the dust has settled a little on Help to Buy, what’s the verdict? At first glance, the scheme offers many first-time buyers a good deal, paying just 5% of the home’s value as a deposit, while a further 20% of the mortgage is interest-free for the first five years. Only a handful of lenders are signed up to the scheme though – so what are all the others doing? No building societies have signed up to the scheme and the Yorkshire Building Society , one of the country’s biggest, recently launched products for those putting down a 5% deposit, but outwith the Help to Buy umbrella – a sign that it prefers to remain independent of the scheme?
Whether you’re a fan of Help to Buy or not, it seems to have loosened other lenders’ purse strings, with a handful of banks and building societies launching new 95% value mortgages. Some of these mortgages come with fixed rate periods ranging from one year to three years.
Many house builders have also said that their business has been boosted by Help to Buy. A week ago, Taylor Wimpey said it had sold all the homes it was building this year. Which makes me wonder: is it enough to take action to boost housing demand, without also taking action to boost housing supply? Wouldn’t a better solution be to build more affordable housing?
It’s too early to tell, Skint pals, whether this newfound desire to assist buyers will last, but whether you’re for it or against it, one thing Help to Buy has done is got all of the banks and building societies working to entice more first-time buyers through the door.
What do you feel? Would you go down the Help to Buy route or steer well clear? Know anyone who’s been involved in the scheme so far?
Lots going on this week, Skint pals. Tomorrow I’ll be bringing you the chance to win £60 of Amazon vouchers in time for Christmas shopping. See you then!