At most, this represents a saving of £2,500- in many ways great as this should cover most if not all of the buying/moving costs. But, is this actually going to make it more possible for more people to get on the property ladder? The truth is- very few!
Where many struggle is getting the mortgage in the first place and, with that, the deposit together. The government would be far better off helping (or even forcing) the banks to come up with better mortgages for first-time buyers than offering what is ultimately a paltry discount.
Much like the discounted VAT rate, I feel this is a piece of legislation that at a very quick glance looks good and pro-active but in reality will have little effect. What it will do is deprive the government of urgently needed cash (that £80 Billion debt is getting any smaller you know) but will it ultimately help anyone buy a property- I doubt it!
Although supported and promoted by the NAEA (residential sales arm of the NFOPP) once again the government has missed the boat. Any number of other moves would have been more effective- capped low interest rates on first time buyer mortgages for the first 3-5 years, greater loan to value mortgages (smaller deposits) for first time buyers but backed by strict lending criteria (income multiples or proof that payments can be met for foreseeable future). Therefore banks couldn’t complain that they are being forced to make risky lending (like the good old days in 2007 when, if you shopped around, you could find 125% mortgages, offers of up to 8 times your salary, lending terms of 40 years…..and more).
It is great that the government is aware of the issues but, unless tackled right, they might as well focus their energy on other important issues.
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