The Government’s new Help to Buy programme is needed in the North-West to help first time buyers get a foot on the property ladder says Coun. Ken Hind, vice-chairman of the Ribble Valley Borough Council’s Housing Committee.
He believes widespread take-up of the Help to Buy scheme could start to get the market moving and avoid a housing crisis post 2020.
“Lancashire – like all parts of the North West – needs to get the housing market moving,” said Coun. Hind. “While house prices have risen in the South East and London by 10% this year with increased demand, parts of the North West are suffering from falling prices and low demand.
“To those who say that the government’s programme will fuel a house price boom, I say that increased availability of new homes will help to control market prices. Regional differences show up in the housing market so people in the North West need the Help to Buy scheme far more than other regions in the country to get on the housing ladder and get the market moving.”
Coun. Hind explained: “The Help to Buy scheme will enable existing home owners to move up market and retired people to downsize. The role of local authorities will be to make sure the homes are available to meet the need .
“Since Labour’s financial crisis, hardworking people have been priced off the property ladder because of the large deposits you need for a mortgage. Conservatives want to help people own their own home – so Help to Buy is designed to assist those who can afford mortgage payments but can’t afford a huge deposit.
How Right to Buy Works
l Mortgage guarantees help those who can afford the mortgage payments but not the deposit. The buyer only needs a 5% deposit, with the Government guaranteeing up to 15% of the property’s value, in return for a fee paid by the lender. Only repayment mortgages will be offered by the scheme, with tough checks on the buyers to ensure they can afford the mortgage payments. The scheme is open for houses up to a price cap of £600,000.
l Government remains vigilant as the economy recovers. So every September, the Government and the Bank of England’s Financial Policy Committee will review the impact of the scheme and examine whether the fees or the price cap should be adjusted.
l Equity loan scheme – the other half of Help to Buy – is already helping hardworking people get an affordable mortgage. Government provides an equity loan of up to 20%, so families only need to secure a 75% mortgage, making mortgage payments more affordable and helping someone buy a home with just a 5% deposit.
It has already proved successful, with 12,500 new home reservations in the five months since it launched.