Monday, 20 September 2021

Thanks George, but will it help local first–time buyers?

WHEN George Osborne presented his final budget before the election last week saying the Government is

WHEN George Osborne presented his final budget before the election last week saying the Government is taking a big step “from austerity to prosperity” the important point for those with an eye on property was the announcement of the new Help to Buy ISA.

The chancellor said savings put aside for a deposit by first–time buyers would be topped up by the Government, to the tune of £50 for every £200 saved.

The new Help to Buy ISA accounts will be made available through banks and building societies and come into force in the autumn.

So what do Henley’s agents say about it?

Phil Booth, director of Philip Booth Esq, said: “This is a very good scheme and it will provide some much needed assistance for first–time buyers who are saving for a deposit on a home.

“There will also be advantages for couples who are both saving, as the scheme isn’t just available per home, it’s available per person, so couples can in effect double up.

“The UK property market has always needed first–time buyers to stimulate the bottom of house chains to allow traditional house movers to climb the ladder.”

The ISA is effectively an expansion of the existing Help to Buy scheme which has helped nearly 83,000 people to buy a home.

First–time buyers that choose to save through the new ISA version will receive a Government bonus to help them take the first step on the housing ladder.

The bonus will represent 25 per cent of the amount saved so, for the maximum monthly saving of £200, the Government will contribute £50, with a maximum Government contribution of £3,000 on £12,000 of savings.

Antony Gibson, sales director at Romans, encourages everyone who doesn’t yet own a property to look into it sooner rather than later. He said: “Whether you plan to buy a property this year or in five years’ time, any support from the Government should be welcomed with open arms.

“This ISA will not only help first–time buyers save for their deposit but it will put less pressure on the bank of mum and dad, who I suspect will be encouraging their offspring to open one as soon as possible. It will also encourage buyers to start saving sooner rather than later, especially important with the 2014 Mortgage Market Review.”

At Savills, Lucian Cook, UK head of residential research said: “The Help to Buy ISA is a further attempt to keep alive the aspiration of home ownership and help first–time buyers overcome the deposit constraints that have been the biggest barrier faced since the credit crunch.

“While it will be welcomed by prospective first–time buyers, limiting the ISA to a £12,000 savings plan with a £3,000 Government contribution should prevent a surge in house prices. It is more likely to help get buyers over the deposit hurdle in the lower value, lower growth markets of the Midlands and the North than say London and the South–East, where significant constraints remain.

“It is also likely to be welcomed by parents and grandparents by making first–time buyers less dependent on the bank of mum and dad and more inclined to contribute some top–up savings when children come looking for assistance to get on the housing ladder.

“However, those first time buyers who are keen to lock into low interest rates and who have access to parental support are unlikely to commit to what is effectively a five–year savings plan.”

Local constraints were also picked up on at family–run business Ballards. Oliver Symons at the Henley branch said: “I am always pleased to see Government initiatives that help buyers get on the housing ladder and the Help To Buy ISA announced by George Osborne is another step in the right direction for home buyers in many towns and cities across the UK.

“As always, the devil is in the detail and the restrictions in place on the ISA are unlikely to result in a hoard of new buyers entering the market in Henley and its surrounding villages.

“The first restriction in the local market place is availability of stock. My understanding is that the bonus from the ISA can only be applied to houses under £250,000 outside of London â?? at the time of writing there are two flats for sale and one house available under £250,000 in the RG9 postcode.

“The second restriction is the contribution limits and subsequent saving time. The limits to the contributions that can be made toward the ISA are £1,200 in the first month and £200 per month thereafter. To benefit from the maximum Government contribution of £3,000 it would take around four years of saving. Recent house price trends suggest there will be very few houses or flats available under £250,000 within Henley and surrounding villages in four years’ time!

“Looking forward, I am hoping to see further Government policies that help the housing market across all price ranges.”

Tim Peers at Peers Hilton agrees: “Any incentive is a good thing! However it makes little or no difference in Henley. At the end of January, the total amount of residential boards being displayed outside homes in the town was approximately 80 per cent To Let/Let By. The vast majority of these units were at the bottom end of the residential market.”

Mr Peers goes one step further, suggesting a way of creating a fairer market by forcing landlords to sell their properties to first–time buyers. He added: “With current capital gains implications, there is little incentive to the investor with a portfolio, to release these properties into the open market for sales purposes.

“Perhaps the Government should address the current imbalance by incentivising the investor to release property for purchase by genuine first–time buyers by removing or lowering the capital gains.”

Trevor Michel at Simmons & Sons agreed the scheme was “good news for the first–time buying public â?? and we all have children too!” However, he too wondered how much impact the new scheme would have in Henley. Despite this, he said: “It will still enliven the market around us which will have a knock–on effect within the town, in what is already a very competitive sector of the market.”

At Knight Frank, the budget served to throw the spotlight on the forthcoming election. Grainne Gilmore, head of UK Residential Research at Knight Frank, said: “Any moves to help first–time buyers get on to the housing ladder are welcome, and a savings scheme which allows buyers to access larger deposits more quickly will help many buy a first home earlier.

“However, in order to address the affordability issues facing any buyers, it is crucial that policy–makers address boosting housing supply across the country. Many parties have pledged to do this in the run–up to the election. Now we need to see the detail of their plans.”

More News:

POLL: Have your say