Are you a first time buyer struggling to take those first tentative steps on to the elusive property ladder? If the answer is yes, then you are one of thousands of people in the same position. This has always been a difficult first step for any new home owner but with current market conditions, high mortgage loans on offer, fuel and food prices rocketing, it seems all but impossible to ever see yourself getting on that first step of the property ladder. The government and large property developers have come up with a plan to help ten thousand first time buyers in the UK make that first step.
The new scheme is called HomeBuy Direct. This plan is aimed at helping first time buyers with a household income of less than £60,000. These first time buyers will be offered the chance of having a 5 year interest ‘free’ loan, borrowing up to 30% on a new property. After the initial five year ‘free’ period these first time buyers will have to pay a fee, of which no details have yet been released.
Property developers have gotten involved in the HomeBuy Direct scheme, hoping that this will keep the house building industry afloat in these difficult times. Whilst the government sees this as a positive move in helping first time buyers to get into the property market. However, this could be argued that, with the housing market in freefall, it would be the worst time possible for anyone to get sucked into negative equity, especially vulnerable first time buyers.
Who decides on the 10,000 people that get the HomeBuy Direct offer? As I am sure there are more than 10,000 first time buyers out there earning less than £60,000. What are the fees that are going to be charged after the end of the five year deal? Would the millions allocated to this plan be wiser spent on helping the current homeowners who are already struggling to make their mortgage payments, instead of encouraging more people to get into a similar situation. Are the government and the renowned greedy property developers really the caped crusaders who have the answer that we’ve been looking for?
A cynical person might say that anything that says ‘free’ usually has a catch, you know the old saying, if it seems to good to be true it usually is! Only time will tell.