Jonathan Cornell, head of communications at First Action Finance said: “I don’t think the £250m scheme is the ‘holy grail’ solution because in reality it’s not a great deal of money to help revive the sector completely. However, it is a start and will greatly benefit the 10,000 first-time buyers it is aimed at.
“The downside to this scheme is that it is limited to new build properties which makes lenders less keen to offer high LTVs. “Usually new builds attract a premium price tag of around 5% because they have not been lived in before, but with house prices trending downwards, the likelihood is that the second hand value will not meet or exceed the new-build premium.”
Nicholas Leeming, business development director at Zoopla.co.uk, said: “Any measures to help first-time buyers are welcome, particularly when they’re set to help the construction industry as well as the housing market. According to the CML, first-time buyers currently pay an average deposit of £25,000, this would plummet to an initial £6,250 – a very appealing prospect.
“But Osborne’s First Buy scheme won’t go beyond scratching the surface of the problem faced by the vast majority of first-time buyers as it’s exclusively for new build properties and only around 11,000 buyers will benefit – a fraction of the overall number of potential first-timers.”
Charles Haresnape, managing director at Aldermore said: “It’s good to see the government acknowledge the plight of first-time buyers, but the scheme is more of a political gesture than a serious attempt to help hard-pressed home buyers.
“The government’s proposed scheme will help just 10,000 first-time buyers get a foot on the property ladder. It’s better than nothing, but we shouldn’t fool ourselves into thinking that, by itself, this scheme will kick-start the first-time buyer market into action once again.”
Neil Warman, chief commercial and finance officer at HML added: “I welcome the government’s acknowledgement of the importance of first-time buyers to the UK housing market through the £250m scheme. With the current high cost of living many young people are struggling to save money for a deposit, so this will be timely news.
“Only time will tell if the scheme will be successful, given the limited success of previous schemes to help people onto the housing ladder. My concern is that the cost of living, student debts, the threat of rising unemployment and reducing house prices may be driving a generational shift in the attitudes to home ownership. “These issues are compounded by the lack of available mortgage products, the reasons for which are well documented.”
