The Government also admits the new product will only be open to the same categories as the current homebuy scheme – public sector key workers, social tenants or those on a council waiting list, and other priority first-time buyers – despite the Government initially stating it will be helping even more FTBs.
A spokesman for the Department for Communities and Local Government admits that the new product will be funded from the existing £500m Low Cost Ownership Budget and still limited to key public sector workers.
The Government says it believes it will now help 25,000 people a year to become homeowners – up 5,000 from its previous target. In its green paper on housing it admits that its current scheme is not flexible enough which is why they decided to launch the 17.5 per cent loan product.
Hamptons technical director Jonathan Cornell says the Government has just been ‘window dressing’ the scheme and says its particularly disappointing that they are failing to put any more money into the scheme.
“The evidence goes against what the Government is claiming to do in helping first-time buyers”, Cornell adds.
John Charcol senior technical manager Ray Boulger adds: “If they are taking it out of the current pot of money it means that it will actually reduce the amount of people they can help as there will be less money for the 75/25 scheme.”
“This is pretty typical of the Government’s stance on housing; they make an announcement that appears positive – which is for some – but it then turns out to be a loss for others.”
Savills Private Finance managing director Mark Harris says: “We welcome any move to help first-time buyers onto the housing ladder but reports that it is just the same pot of money available, distributed through slightly different means, is a missed opportunity. It is all very well tweaking and adjusting the way in which funding is distributed to those struggling to get on the housing ladder – what is really needed is an increased commitment from the government in terms of hard cash – and more progress on the joint public/private funding initiatives.”