The second phase of the government’s Help to Buy scheme is being brought forward by three months, increasing scrutiny on the sometimes-controversial initiative. The next phase will extend beyond the new housing market, enabling loans of up to £600,000 to be taken out with just a 5% deposit. Below are some of the key arguments for and against the Help to Buy program.

For
• Help to Buy phase one has increased mortgage availability to first time buyers, who would otherwise be unable to get on the property ladder.

• Phase two will make it easier for ‘next time buyers’ and others to obtain a mortgage.

• Help to Buy has resulted in many more property sales across the UK, and has therefore seen associated businesses (estate agents, removals, furniture suppliers, home/let property insurance providers) enjoy a boom.

• Help to Buy is helping first time buy-to-let investors who wish to take advantage of the booming rental market.

Against

• Due to Help to Buy, house prices are rising fast across the UK and especially London, forcing buyers to take out larger mortgages.

• Some voices in government and in industry believe Help to Buy may be creating a housing bubble, in which prices will eventually crash.

• Help to Buy does not address why housing is so expensive in the UK – it simply funds the huge price tags associated with it.

• Help to Buy may getting people into debt they cannot afford, in an economy that is far from stable, in is seeing wages fall while living costs rise.

What do you think of Help to Buy? A necessary measure to boost the housing market? Or a risky venture that may cause problems in the future?

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