Critics of Help to Buy scheme are out of touch

By Christine Farrell

Danny Alexander, the chief secretary to the Treasury, has said that people criticising the Help to Buy scheme as leading to a housing bubble are out of touch and "need to get out more".

The new government backed scheme will make 95 per cent mortgages available to property purchasers, and will apply to houses up to the value of £600,000. Lenders will have the security of a government guarantee on 15 per cent of the mortgage, though have to pay a fee for it. It is estimated that requiring first time buyers and home movers to put up only 5 per cent of the value of the property themselves will reduce the average deposit in Northern Ireland and the rest of the UK from over £40,000 to slightly over £10,000.

At the launch of the scheme the chairman of the Commons Treasury select committee, Andrew Tyrie, warned that it could lead to a new housing bubble and threaten financial stability. Mr Alexander reacted to his comments, and other general talk of a housing bubble by saying that people were out of touch with the overall property market, and needed to stop focusing on the gains in London. He said that removing London properties from the overall statistics meant that the average UK price increase over the last 12 months changes from 3.3 per cent to just 0.8 per cent. He also clarified that 70 per cent of the transactions in London would fall outside the Help to Buy scheme because they involve houses over £600,000.

RBS and NatWest are the first lenders to offer products under the scheme, with other major lenders expected to follow suit by the end of the week.

If you are a first time buyer in Northern Ireland, or a home mover who is selling and buying, contact one of the property solicitors at Wilson Nesbitt for information on the conveyancing process by calling 0800 840 9290.

Or submit your details online for a call back by clicking here.