Island Life Magazine Ltd February/March 2014 | Page 87

PROPERTY

Success or otherwise of Help to Buy
by Richard Dickson
of Hose Rhodes Dickson
The Help to Buy Scheme is a new
Government initiative which in essence
allows people to buy a property up to
£600,000 with a five per cent deposit,
giving people the chance to buy a
property they could not previously afford.
This is not to be confused with the
Equity Loan Scheme, which was
introduced in April 2013, and was
specifically designed to kick-start the new
property market and help the building
industry. It seems it has had the desired
effect and helped increase the number of
sales of new homes across the country.
There are similarities between the
schemes as both have a £600,000 price
ceiling and both require the buyer to have
a five per cent deposit, but there seem to
be some misconceptions attached to the
Help to Buy Scheme. The main criteria are

that anyone is potentially eligible, not just
first time buyers, the property you wish to
purchase must be your only property and
you must occupy it.
My survey suggests few buyers have
taken advantage of this special mortgage
offer. My survey is limited in numbers,
and probably reflects a
relatively small percentage
of the total Island
market. But I would
still be very surprised
if many buyers on
the Island have
been helped by this
Scheme.
The customers
who have looked
into Help to Buy
with us have ultimately
used alternative banks and
building societies, as generally the
deals on offer via the Scheme have not
been attractive enough to warrant using

the lenders offering them. The number of
95 per cent mortgages available since the
launch of Help to Buy has increased, with
many being outside the Government
scheme. One other point to take into
consideration when shopping around
is the mortgage arrangement fee, which
often can make a difference
when seeking the best deal.
I believe both Help to
Buy and the Equity
Loan Scheme have
been helpful and
have had the desired
effect. At the first
sign of a national
housing boom I am
positive that the Bank
of England will put up
interest rates. Alternatively,
they now have the power to
impose limits on lending and I am
sure they will use one or both of these
mechanisms as a brake.

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