Help at hand to buy a home

More than 40 people in South Holland have found the key to getting a leg up the property ladder using the Help to Buy scheme.

The Government scheme has now been running for 13 months and across the country has helped thousands of people to buy their first home.

The initial “equity loan” scheme sees the Government lending up to 20 per cent of the cost of a new home, meaning buyers only need to provide a five per cent deposit and a 75 per cent mortgage.

No fees are charged on the 20 per cent loan for the first five years.

Since earlier this year, a new “mortgage guarantee” scheme has been added, which sees the Government offering lenders the option to purchase a guarantee on mortgages so they are able to offer home buyers more high-loan-to-value mortgages of 80-95 per cent.

The first house purchases using the scheme are just completing around now.

In South Holland, a total of 44 equity loans have been completed – 36 of which have been by people buying a new Broadgate Homes property.

Chief executive Ian Canham said: “I am surprised there have only been 44 Help to Buy loans in South Holland, but we are pleased that we have worked well with the system and will continue to do so.

“There are other builders in South Holland offering Help to Buy but a lot of their homes are snapped up early by the buy to let market.

“We don’t sell to the buy to let market, which means more of our homes in that price range are available to first time buyers.

“It is a very good scheme. It has worked for us and for the people who have used it to buy their home.

“It’s easy to use, as long as you have the right financial adviser to fill in the paperwork, and I would advise anyone thinking of buying their first home to look at it.”

Nationally, the Help to Buy scheme has been used in the purchase of 20,548 properties in the first 13 months.

The majority of sales were to first time buyers and the average purchase price was £205,424.

But there has been concern that the scheme is helping to “cook” the housing market – a worry not shared by Mr Canham.

He said: “I don’t think that is the case, it’s definitely not the major concern.

“I think one of the bigger issues facing the housing market at the moment is a supply issue, with builders being forced to wait up to 40 weeks for bricks to be delivered.

“During the recession brick manufacturers shut kilns to save costs and they have been slow to re-open them – partially as it is not in their interests to do so as a shortage of bricks means the price for them goes up.

“We are now having to import bricks to meet the demand.”

Mr Canham says the housing market in South Holland can now be described as “steady and improving”, although he added: “We are not yet back to where we were before.”