Right to Buy or Right to Loan!

If you stand still you die. Or is it if a Shark stops swimming? Whichever, the property market cannot realistically wait for wages to rise to allow it’s members to move. We know that’s not going to happen. So has the scheme allowing us the ability to save the deposits we need and afford the repayments on the houses we would love to own, been redressed, elaborated and improved?

Shouldn’t the very fact it’s conception occurred become the  unwritten warning following the aftermath of David Cameron’s fast tracked “Help To Buy Scheme Part Deux”?

The scheme will not lend to those without a 5% deposit in place on a new or now an “old” build home and it will undertake “strict” application measures to ensure the affordability is legitimate. The 95% balance will be in a repayment form rather than interest only and there will be no addition loan, just a guarantee. So, in essence the vehicle is identical to the one we discussed a few weeks but with Grandpa being replaced by The Government.

The dotted i’s and crossed t’s have not been finalised but lenders have geared themselves up for this. The opportunity will have an initial live span of three years. This may be longer than Grandma as well. I’m not being cynical I’m just worried. Although on paper the bubble burst a while ago now, trying to re-inflate it without taking into consideration why it happened seems dangerous.  It’s not just me that’s a little concerned. The chief executive of Britain’s biggest mortgage lender, Lloyds Banking Group,  says he fears Help to Buy could create a dangerous bubble in property prices. He said this a matter of weeks after telling the Government they had his unequivocal support. Antonio Horta Osorio seems to have stopped in his tracks and as the CEO of Lloyds, who own Halifax a major lender in this market, it is particularly concerning. I’d like to think that as long as everyone remains sensible and the “new” lending is vigilant then it could help stimulate the market. Strangely enough it does though seem to be gaining momentum without it?     By Mark Walmsley

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