On Saturday, Rightmove published a rather smart poll which it had the foresight to commission exactly one month on from the announcement in the Budget of the government's First Buy scheme to help first-time buyers. Rightmove polled over 3,000 would-be first-time buyers as part of its "Consumer Confidence Survey" and found that around two in five were more likely to purchase a new-build property since the announcement was made, with nearly half of this group indicating that they were "much more likely" to buy. In addition, a mere one in five of those surveyed stated that they didn't feel the scheme was attractive to them. The results offered further encouragement to First Buy in its early stages.
For those who've been kipping in the back, the First Buy scheme allows first-time buyers to purchase a new-build property using just a 5% deposit, with a further 20% deposit provided in the form of a five-year interest-free loan, jointly funded by the government and the housebuilder. Those of us who can recall with affection the years of the norm on deposits being 5% (or less!) are not best placed to judge the powerful disincentivisation that the need for large deposits creates for what would have previously been the natural first-time buyer cohort. This group has seriously fallen away.
As Miles Shipside, director of Rightmove, comments: "First-time buyers are the lifeblood of the volume housing market and the scarcity of this buyer group in the current market has been keenly felt. However, this survey shows that many are ready and willing to purchase - they just need the leg-up that a scheme like First Buy can provide in order to get them over the deposit hurdles currently being set by lenders. With only one in five viewing the terms of the scheme as unattractive, there appears to be strong support for deposit-raising initiatives along these lines."
However, there is an elephant in the room that is also neatly highlighted by the Rightmove results. First Buy suffers a severe limitation in that the scheme facilitates the purchase of only new-build properties. It's unsurprising, therefore, that over a third of first-time buyers (that is, the smarter ones) questioned by Rightmove stated that the scheme would make no difference to their buying intentions as they don't wish to purchase a new-build home. The major issue in the current market is the lack of purchasing at the foot of the resale market. And this is crucial: it is the resale market that is THE market, not the new-build market.
Moreover, and knowing what I, and my peers in the property industry, know about most new-build stock, if I ever do get to be in the position to assist my own children in getting onto the property ladder (and don't be counting your chickens, kiddiewinks), I shall be steering them firmly away from paying the (estimated) 20% premium that accrues to new-build stock, some of which, frankly, is so shoddy and meanly specified that it should be offered at a 20% discount. For my money, give me an honest flat above a shop in a Victorian terrace, with decent room sizes, any day of the week.
It would seem that the channelling of first-time buyers into new-build properties looks set to benefit housebuilders in the main and not the market as a whole. Three cheers to Rightmove, which is calling for the opening-up of similar initiatives to include resale properties, as this "would be a real boost for the wider housing market and encourage first-time buyers to get involved by allowing them greater choice". This call must be supported. Very helpful bit of polling.
However, there is an elephant in the room that is also neatly highlighted by the Rightmove results. First Buy suffers a severe limitation in that the scheme facilitates the purchase of only new-build properties. It's unsurprising, therefore, that over a third of first-time buyers (that is, the smarter ones) questioned by Rightmove stated that the scheme would make no difference to their buying intentions as they don't wish to purchase a new-build home. The major issue in the current market is the lack of purchasing at the foot of the resale market. And this is crucial: it is the resale market that is THE market, not the new-build market.
Moreover, and knowing what I, and my peers in the property industry, know about most new-build stock, if I ever do get to be in the position to assist my own children in getting onto the property ladder (and don't be counting your chickens, kiddiewinks), I shall be steering them firmly away from paying the (estimated) 20% premium that accrues to new-build stock, some of which, frankly, is so shoddy and meanly specified that it should be offered at a 20% discount. For my money, give me an honest flat above a shop in a Victorian terrace, with decent room sizes, any day of the week.
It would seem that the channelling of first-time buyers into new-build properties looks set to benefit housebuilders in the main and not the market as a whole. Three cheers to Rightmove, which is calling for the opening-up of similar initiatives to include resale properties, as this "would be a real boost for the wider housing market and encourage first-time buyers to get involved by allowing them greater choice". This call must be supported. Very helpful bit of polling.
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