A new solution?
Those investing in the property market will wonder what, if anything, the government can do to help people get on the property ladder. A reduction in house prices is clearly not helping, partly because the cause of it is the same factor – the credit crunch – which has made getting a mortgage harder and more expensive in the first place. In any case, today’s Lloyds TSB Scotland figures for the first quarter of this year have revealed that in Scotland prices are rising again (up 2.3 per cent) after a dip in the fourth quarter of 2007. Anyone living in Glasgow, Edinburgh or Aberdeen will find no improvement in affordability, although Dundee has seen a fall.
With the Bank of England possibly hamstrung in its interest rate policy by rising inflation and the special liquidity scheme to help bring interbank lending rates come down perhaps some way off having a major impact, the government has sought to take its own steps.
The plan announced by prime minister Gordon Brown yesterday was to introduce two new funds. The first would spend 200 buying up unsold homes to either rent as social housing or sell to first-time buyers on a shared equity basis. This latter group would also be helped to buy on the open market by a separate 100 million fund.
Adding flesh to these bones, the housing minister Caroline Flint announced today that those getting help to buy this way through the Homebuy scheme would no longer have to be key workers. She said: “Most families aspire to get onto the housing ladder, but are being priced out of the market. We want to give them the support to help them buy an affordable home.”
However, the reception to the new plans has been mixed. The National House Building Council chief executive Imtiaz Farookhi was positive, saying they “will help ease some of the current market pressures”. A negative response came from Galliford Try Homes managing director Ian Baker, who described the plans as an “empty gesture”. He added: “An allocation of 200 million will only equate to a tiny percentage of new homes and instead I would have liked to see some more practical, meaningful steps taken by Government to really assist today’s buyers.”
For those looking to buy property to rent
instead of their own homes, this may mean that the upward pressure on rents will continue, as many would still find it hard to get on the housing ladder if Mr Baker is right.
Fortunately, it appears, optimism remains high among investors, who may suspect that a period of lower property prices and higher rents is a good time to be investing in property
, not least if they are in it for the long run and therefore able to make an eventual tidy profit from the next upturn. Evidence of such optimism comes from the latest survey by Mortgage Express, Letting News reports. This showed that six out of ten landlords believed now is a good time to be adding to portfolios. For one group in the property industry, it seems new initiatives from the government will not be required.
Jim Barnaby is a real estate investment broker and successful property investment adviser delivering research and selected UK and overseas property investment solutions with experience in spanish properties, french property investment, German property, Cyprus holiday homes,
Property in Cape Verde
, German property investment,
cape verde property
buy to let property.