Rebecca Wilson says: “The announcement by Labour Government to introduce a new first time buyer scheme is welcome news for the housing market, particularly at a time when affordability remains a significant barrier and at a point when the market remains under pressure.
For the scheme to have a meaningful impact, it needs to be attractive and workable for buyers and lenders alike. We’ve seen initiatives like this before, including Deposit Unlock, how the mechanics of a scheme can ultimately determine whether it works effectively at scale. We need to keep in mind that it’s not a silver bullet solution for the market.
The affordability question will also be critical. Property price caps could make a real difference in some areas, but they will not make every market affordable, and the scheme cannot be expected to kick start every part of the country in the same way.
Timing is everything. It is important that the Government now moves quickly to implement the scheme. With rents continuing to rise, first-time buyers need clarity on when and how the scheme will operate and we can’t risk stalling the market. There is a real risk that any uncertainty around its introduction means further stalling activity in the short term.The housing industry needs a shot in the arm, and this could provide that. The Autumn Budget will be the key moment to understand the detail, particularly around the price caps for this and implementation.”
Scott Cabot says: “This initiative is welcome news for first time buyers who struggle with deposit requirements and affordability, particularly in the current interest rate environment. Government data shows that the previous Help-to-Buy scheme helped almost 390,000 people buy a home, the vast majority of which were first time buyers.
“However, we need to remember that a demand-side initiative sauch as this, while giving confidence to housebuilders, is not a silver bullet in terms of addressing structural supply-side issues across the housing market.
“This new scheme ultimate efficacy for first time buyers will be determined by the additional details surrounding like the regional price and income caps, along with how long the interest free period lasts and what interest is charged afterwards.”
