Details of the new ‘Help to Buy’ scheme have been widely reported across all media since the Government brought forward the 2nd phase of their initiative.
It’s been a great news story for the past few weeks with Banks confirming that they plan to extend their opening hours in order to cope with demand. Some quoting that they expect many thousands of new mortgage applications .
What the Government has actually achieved is a UK wide marketing campaign to enlighten would-be house buyers that 95% mortgages are available to those who can afford the repayments.
The reality is 95% loan to value mortgages have been available for some time albeit at slightly higher interest rates than what is likely to be offered as a result of this new initiative.
What the introduction of the scheme will do is increase competition, bring slightly lower interest rates for these high loan to value products and more importantly bring many more buyers to market.
More Buyers Mean Higher Prices?
We all know that supply and demand is the one thing that does affect property prices and whilst it is impossible to forecast, with any certainty, what might happen to prices in the future, what we do know is how the market is reacting to the current climate. By way of example:
Edinburgh Solicitor Property Centre have reported that ‘The number of homes purchased during the third quarter of 2013 in Edinburgh, the Lothians and Fife increased by 43.8% compared to the same period last year reaching its highest level in 6 years’. In Edinburgh 40.6% of properties sold between June and September achieved their Home Report valuation, up from 26.8% a year ago.
Sarah Speirs, Director of the Royal Institute of Chartered Surveyors in Scotland said; ‘It’s encouraging that the market is starting to improve in all parts of the country with more buyers looking to make a move and more sales going through. Even so, it’s a big concern that the supply of property coming to the market is lagging so far behind demand, particularly with the recent launch of Help to Buy in Scotland. This imbalance is likely to result in further upward pressure in prices over the coming months, particularly in popular areas’
Do You Need ‘Help to Buy’
It’s what we are good at. Helping you understand the whole process of buying for the first time or selling your current property to move up the property ladder or even downsize. Whilst the governments ‘Help to Buy’ initiative is all about access to mortgage funds our help is designed to give you an overview of the dynamics of the local market and help you understand what type of property, in which area is affordable. We will also give you a pre sale valuation of your own property.
Look at the evidence and draw your own conclusions about whether you believe prices are likely to move in an upward direction in the near future. It is quite possible that an equal balance of buyers and sellers means that property prices do not increase but instead remain static in the short term. Either way – both of these outcomes deliver a more stable and sustainable market which is only to be welcomed.
If moving home is on your mind, ask a us for a no obligation consultation.