subject: Mortgage Indemnity Scheme Welcomed [print this page] The Government has revealed a mortgage indemnity scheme that will help property buyers to get onto the housing ladder. Sarah Barnes, a Lancashire property specialist at Napthens solicitors welcomes the news, but warns that more needs to be done.
The NewBuy scheme was unveiled by Housing Minister Grant Shapps, which is backed by construction businesses, industry groups and banks. NewBuy will assist property buyers by allowing them to loan up to the 95% of the price of certain new homes, with builders paying a fraction of the sale price and taxpayers being an additional guarantee.
NewBuy is only available in England for properties up to a highest sale price of five hundred thousand. NewBuy aims to assist building societies and banks to loan up to 95% of the property value, which means that only a relatively small deposit is required by property buyers.
The head of Napthens Residential Property solicitors, Sarah Barnes, welcomes the assistance that is being offered to first time property buyers, highlighting the new statistics from the Council of Mortgage Lenders and the Bank of England which show that loaning to landlords is higher than to private property owners as proof that additional support must be given.
In Jan 2012, the loaning from all forty seven building societies was just one million pounds, which equates to seven standard sized mortgages.
Sarah Barnes warned that more support is required for property buyers, for example by increasing the time scale of the Stamp Duty Land Tax relief for first time buyers meaning such property purchasers are not required to pay the tax if the house they are purchasing is valued less than two hundred and fifty thousand which ends on the 24th of March.
Sarah a Residential Property solicitor says Critics say NewBuy is merely a way to help builders, and not the property buyers.
Once the Stamp Duty Tax relief stops at the end of March, the Government will have removed a major tax relief for first time property buyers, while they continue to say they are serious about supporting the housing market. Many in the industry believe the Government is giving with one hand and taking away with the other, with no real improvement.
We require seeing a larger dedication to the housing market or the declining numbers of first time property buyers will persist. The latest statistics show the average age of the first time property buyer that is not assisted by their parents is nearly forty years old, with four out of five of those under thirty given support.
It is obvious that we require continual devotion to breathe new life into the housing market.
