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(EstateNewsWire.com, April 01, 2013 ) San Francisco, CA -- Experts took the time to defend the “game-changing” loans that were set to help many in the property market in order to buy homes. However, critics have stated that the plan could be used by the more wealthy to buy second properties instead.
The new multi-billion pound plan Help To Buy scheme has been hailed by some as a positive option for the market. However, Shadow Chancellor Ed Balls has insisted it amounted to a “spare homes subsidy” for the better-off after it was brought to light that people already on the ladder could easily buy an extra property with the same strategy.
The Treasury took the time to defend the scheme, noting that it could mean parents are able to buy a second home with what is a Government-backed mortgage. In the eyes of the optimists, this could be used as a home for a child.
The policy is a standard-bearer for the Chancellor's Budget, and is aimed toward encouraging lenders to offer 95% mortgages, which would lend itself to the building of more homes.
Under the new mortgage guarantee, which is within the overall plan, the Government would underwrite the risk for up to 15% of all loans with only a 5% deposit.
Under the equity element of the scheme, a new 20% loan would be extended to any buyer of new-built homes that were under a certain marker. The idea has received major backing for enabling the first-time buyer market and home movers, as it is said to ease the access to mortgage funding and house purchases.
Economist director for Construction Products Association, Noble Francis, called the move a “game changer” and stated
“This should feed through to a major expansion of housebuilding over the next few years, especially in key areas of demand like London and the South-east.” Trevor Abrahmsohn, boss of estate agents Glentree, said: “Hopefully, this will release money all the way up and down the system.
“As the property market gets healthier, so there is a beneficial, spin-off effect on the retail sector.
“It gives confidence to house builders to build not just in the upper and middle price ranges, but also down at the lower end.”
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