Raising Stamp Duty

The lack of first time buyers is one of the main reasons for the slowdown in the property market. The recent Budget did not do anything to help first time buyers’ proving the government is not in touch with what is going on.

The lifting of Stamp Duty that the Chancellor gave was only for shared ownership schemes and these are only a very small part of the market. If the Stamp Duty threshold were to be raised from £125,000 to £150,000 it would allow 17% of property sales to be outside Stamp Duty payments.

Realistic growth could be seen by lifting Stamp Duty thresholds for first time buyers and if lenders were to be more sympathetic in offering realistic loan to values.

Rate Increases

Nationwide has put up its 75% and 90% loan to value deals by 0.2%.

This is another knock for first time buyers after the entire 125% loan to value products have been removed from the market.

Nationwide’s two year fixed rate of 90% loan to value is now 6.45% up from 6.25% with no reservation fee.

The two year 95% loan to value fixed rate at 6.85% stays the same but with the option of a 6.45 loan to value with a £499 reservation fee.

The Director of mortgages at Nationwide stated that their deals were very good value for those who wish to borrow 95% of the property value.

First time buyers should shop around to compare costs before committing to any one deal.

A Mortgage manager says that first time buyers will pay the price as high loan to values are withdrawn and tracker rates rise.

Property Slump

Attitudes of first time buyers would change about buying and renting if the property market takes a downturn.

A survey registered that around 33% of those buying or considering buying a property were first time buyers. Out of those surveyed 87% said renting was a waste of money and 63% said they were considering buying now for fear they would be priced completely out of the market in the future.

It was during a discussion it was decided that these views came from the fact that this generation had not seen a downturn of property prices and therefore assumed that house prices only rose in value.

Some consider that if first time buyers thought house prices would fall they would not consider renting a waste of money.

The writer of the report said it was obvious people would want to at least break even when selling their property and if they were not likely to would not sell unless forced to.

Government to help First Time Buyers

The Government is planning a new scheme that will allow first time buyers to buy a property.

The scheme would mean that councils would provide surplus public sector land to a local housing company. The council and private sector would form a partnership and councils would offer their own deals for keyworkers and first time buyers through the homes built on their land.

So far fourteen local authorities have shown a keeness on the idea.

The Housing Minister says that more houses are needed and this would be the ideal way of helping keyworkers and first time buyers to get a foot on the property ladder.

The idea is considered a good one in principle but councils must ensure that the builders stick to it as some only want to build properties that they will high returns from.