Article by Anna White
Even at the peak of the pandemic, in an era of financial uncertainty and with young workers disproportionately on the furlough scheme, the number of homes being sold to first-time buyers continued to rise. They remain a major player in the UK housing market.
Over the past 12 years the percentage share of homes sold to those taking their first step on the property ladder has climbed from 18.1 per cent (153,000 homes across the UK) in 2009 to 23.7 per cent (344,000) in 2021, according to Hamptons estate agents.
While historically low interest rates have contributed to this, along with increasing provision of “affordable homes” schemes such as shared ownership, the big driver has been the Government’s shared equity initiative, Help to Buy.
The programme, which has been running since 2013, allows first-time buyers to borrow 20 per cent of the value of a new-build home (40 per cent in London), with a five per cent deposit and a 75 per cent (or 55 per cent in London) mortgage.
The brainchild of the former Chancellor George Osborne, Help to Buy was hailed as the biggest government intervention in the housing market since Right to Buy, and over the last nine years it has made the home ownership dream a reality for many young buyers.
However, time is running out to utilise the scheme as Help to Buy ends in April 2023, with experts advising to act fast.
Property analyst Anthony Codling recommends starting the search now. “At the moment there is no true replacement for Help to Buy from the Government, so if you want to buy a home with a small deposit, I recommend you get your skates on,” says Codling, founder of online property platform, Twindig.
SEIZE YOUR CHANCE WITH WESTON HOMES
There are still plenty of locations to choose from at Weston Homes. Prospective buyers can register their interest now for stylish one- and two-bedroom apartments at Manor Lane in Feltham, just beyond Hounslow and along the west London regeneration corridor. Help to Buy is available for this new micro neighbourhood which comprises 83 new homes, all showcasing Weston Homes’s signature, all-inclusive specification.
“With lockdowns still fresh in the memory, and a commitment to create healthy homes for emotional and physical wellbeing, every apartment has a balcony or terrace, providing space to relax and unwind,” says Bob Weston, founder and chief executive of Weston Homes. “An extension of each household’s private outside space will be the landscaped communal courtyards which the scheme is designed around. They act as a secret urban oasis in the heart of Feltham.”
The new homes are less than a 10-minute walk from the town centre and also from Feltham train station, which has a direct line to Waterloo. There are four large parks nearby, too, of which Hanworth Park is the closest. Prices start from £300,000 (call 01279 873300 or visit Manor Lane).
Outside of Greater London, but within the capital’s expansive commuter belt, Help to Buy is also available at Gun Hill Park by Weston Homes, in Aldershot.
This Grade II-listed military hospital, which opened in 1879, has been transformed into a luxurious collection of one-, two- and three-bedroom apartments and two-, three- and four-bedroom houses, while preserving and cherishing the historic facade and clock tower.
The commuter town, nestled in the Hampshire countryside, is within easy reach of Farnham, Farnborough, Woking and Guildford, and it’s an hour’s train journey direct into Waterloo.
Prices start from £380,000 and range up to £850,000. Call 01252 757294 or visit weston-homes.com/gun-hill-park/.
Other Weston Homes developments with Help to Buy available include:
Edinburgh Way, Harlow, Essex
Springfield Park, Maidstone, Kent
The Venue, Hayes, Greater London
The Laundry Works and Watford Cross, Watford, Hertfordshire
Victoria Central, Southend-on-Sea, Essex
SO, WHAT HELP WILL THERE BE FOR FIRST-TIME BUYERS WHEN HELP TO BUY EXPIRES?
Innovative developers are taking matters into their own hands. Weston Homes is running an exclusive scheme called First-time SecureBuy.
In the face of rising house prices, first-time buyers can secure a plot of their choice at today’s prices for just a £500 reservation fee. They only need a five per cent deposit and can apply for a mortgage six months before the home is completed. Even if this is a year or two down the road, the value of the home will stay the same as the day they reserved it.
There is more help, too, in the form of the Discount Market Sale (DMS) initiative. Those prospective buyers who live or work within the local area of a Weston Homes development which participates in the DMS scheme, could be eligible to save 20 per cent on a new home.
In short, with DMS a buyer owns 100 per cent of the property but at 80 per cent of the price.
Working with local councils, a pre-selected range of homes will be reserved for DMS, and as such will already have the 20 per cent saving applied to the advertised price. Eligibility, terms and conditions vary within each location and with each local council.
A limited group of housebuilders has also teamed up via the Home Builders Federation with a couple of lenders and launched Deposit Unlock, a 95 per cent loan-to-value new-build mortgage product.
The housebuilder provides a mortgage indemnity guarantee to the lender on behalf of the home buyer, enabling them to put down just five per cent. This is available on Weston Homes properties.
Online mortgage brokers are coming out of the woodwork, too, with companies such as Ahauz offering equity loans to cover the deposit for first-time buyers.
The Government is in the early stages of launching the controversial First Homes. This discounted home buying initiative is available only to first-time buyers who live locally to the development.
The new-build property will be sold at a 30 per cent discount (which equates to £100,000 on the average home across the UK) to locals, with top priority going to key workers and the military. The quality of the new home must be the same as market rate housing but the price tag will be capped at £250,000 outside Greater London and £420,000 in the capital. Household earnings eligibility must be £80,000 and below nationally and £90,000 in London.
When buying as a couple, neither partner can have previously owned a home. When the time comes to sell, the property will be independently valued with the third off discount being passed on.
So far the scheme has been trialled in Bolsover (West Midlands) and rolled out in Staffordshire and Durham and is coming to Hampshire.
The property industry does not view First Homes as a Help to Buy substitute and there are concerns that selling on at a discount stops the first-time buyer becoming a second stepper and moving up the housing ladder. The jury is out on how effective First Homes will be.
So, the time to capitalise on Help to Buy is now, before that door closes.