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News: UK First Buy scheme met with skepticism

Fri, 25 Mar 11

Though estate agents admitted the British government’s new scheme for first home buyers was a small shot in the arm for the market, most were convinced that it didn’t go far enough. Below are some of the comments we at the Move Channel received from key property industry players:

'The announcement of a £250m FirstBuy programme will see the government and house builders jointly offer loan help for first-time buyers purchasing newly-built homes. Whilst this is good news for first time buyers, the scheme will only help an estimated 10,000 buyers as it is focuses on new builds only; the scheme is open for a year only and most importantly, it depends on the banks’ willingness to offer credit to first time buyers - something which hasn’t been forthcoming of late.'
Peter Girling, Chairman, Girlings’ Retirement Rentals

'Lenders generally require 5% larger deposits for new-build housing than they would for other properties. Although the government’s scheme to assist buyers with limited deposits is clearly also designed to support the construction industry – which received special mention in the Chancellor’s speech – the restriction of the programme to the new-build market means larger contributions of public money will be required to get new buyers onto the ladder.'
David Newnes, Managing Director, LSL Property Service

'The Firstbuy scheme, which is essentially a resurrection of the old Homebuy Direct, will bring a boost to the housebuilding sector by encouraging 10,000 first time buyers to choose new homes. This will help stimulate the industry at a time when new housing starts are extremely low, largely due to lending criteria demanding large deposits. However, this measure will have little impact on the wider housing market, when we consider the fact that there were 102,000 completions of new homes in 2010.'
Andy Hill, Chief Executive, Hill Residential

'Soaring inflation and higher than expected Government borrowing undoubtedly confined the Chancellor’s room for manoeuvre when setting out the ‘fiscally neutral’ Budget, but the property and mortgage industries should not be entirely disappointed. At last, the Government is renewing the practical help offered to first time buyers with the introduction of its First Buy scheme, which will get 10,000 families onto the housing ladder and boost lending.'
Alison Beech, Business Relationship Director, Spicerhaart estate agency

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