Tuesday 13 March 2012

The newbuy scheme won't save the housing market | Phillip Inman | Comment is free | guardian.co.uk

The newbuy scheme won't save the housing market | Phillip Inman | Comment is free | guardian.co.uk

There is a strong head of steam behind the government's newbuy scheme, which aims to revive the almost classless dream of home ownership. The advance publicity claims up to 100,000 people will get government support to buy homes worth up to £500,000 in a move the coalition describes as a major boost to the moribund housing market.
Rightmove, a property website, says a survey of 2,750 potential buyers reveals that around 40% are "more likely to buy" in the next 12 months. Homeowners in their first home will be freed to trade up. Rightmove says 24% of this group will be more likely to buy a bigger home.
Unsurprisingly, all the big property development firms have welcomed the Treasury guarantee that allows lenders to offer higher loan-to-value mortgages. Big deposits will be history when buying a newly built home. The return of the 95% or even 100% mortgage is imminent. Barratt Developments says nearly 20,000 potential homebuyers have pre-registered their interest on the company's website with the weekly registration rate now hitting 1,500. A look at the construction sector shows it needs all the support it can get. Official figures paint a gloomy picture of declining orders and mounting job losses. The residential sector is particularly downbeat away from London and the M4 corridor.

But in a market that is missing around 50,000 transactions a month .......

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