Online House Hunter: FirstBuy

Opening the door to first-time buyers?

I FEEL duty-bound to flag up the government’s FirstBuy scheme, despite it being greeted by cynicism from a number of sectors in the property market.

You may recall the government announced this in the March 2011 budget. Essentially it is a shared equity scheme for new-build properties which reduces the amount of deposit initially required. It is aimed primarily at first-time buyers with priority given to social tenants and key workers. Cynics argue that the £250m scheme is barely a drop in the ocean and is unlikely to do much for the homebuyer or housing markt in general.

Under the First Buy scheme, the government and the housebuilders will jointly provide a 20 per cent loan to top up first-time buyers’ own deposit of five per cent. This will allow them to take out a mortgage for 75 per cent of the property. Loans will be free of charge for the first five years and repaid when the property is resold.

Rightmove has now conducted a survey of 2,400 people which found 45% of potential first-time buyers felt more likely to get on the housing ladder thanks to the Government’s FirstBuy scheme.

Although 59 per cent stated that they had previously heard of the scheme, 22 per cent said they did not understand whether
or not the scheme could help them to purchase for the first time.

Rightmove director Miles Shipside comments: “FirstBuy was introduced to help more first-time buyers get onto the property ladder, so with nearly half of prospective first-time buyers stating that they are now more likely to buy thanks to the scheme it seems this could be a real boost for many. However, given such a positive response it must be asked whether more can be done to drive awareness among the 37 per cent of first-time buyers that did not know it existed.”

FirstBuy is doing its bit by setting up a section on its website, developed in partnership with the Homes and Communities Agency.

Even I would admit to being confused by the FirstBuy scheme. It is operated by HomeBuy agents and their website has as its logo Homebuy UK Government (indeed it’s linked from DirectGov). But in bold at the bottom of the page is: “This is not a government site”. And although the FAQ says you do not need to be a key worker to be eligible, the site goes on to say key workers will be given priority. But of interest to many will be the Rent to HomeBuy option which offers new-build homes to rent with the expectation the tenant will eventually buy a share of the property. (Note also the link to Cumbria is broken but the agent is Riverside).

For first-time buyers wishing to know more about the scheme I’ve posted some links below.

LINKS:

• Independent online property search
• Right Move First Buy section
• DirectGov: FirstBuy
• Homes and Communities Agency
• National House-Building Council
• National Federation of Builders

Recent Posts on Property

• It's National Work From Home Day today
• Where have property prices been reduced most in the UK?
• Is Rushcliffe the best place for families to live?
• Where are the most affordable towns for key workers?
• Rents around London's nicest parks