FIRST-TIME BUYER FUNDS 'IN CHAOS'
THE property market is set to be plunged into further chaos because money earmarked for first-time buyers is running out, a leading estate agency group has warned.
Spicerhaart claim that house chains are collapsing because first-time buyers can’t get their money through under the Government’s new shared ownership schemes designed to get the market moving again.
The problems relate to MyChoiceHomeBuy, a scheme designed for first-time buyers, key workers and social tenants choosing any property on the open market.
Under the scheme, up to half of the cost of a new home will be shared by a housing provider and applicants obtain their conventional mortgage from a range of qualifying lending institutions.
Paul Smith, Spicerhaart’s chief executive, said: “The Government’s MyChoiceHomeBuy initiative was meant to be a tonic to the housing market.
“But instead of putting sufficient funds into the scheme to make a real difference, first-time buyers are being left in the lurch, with massive delays to their applications or complete refusal in some parts of the country where the money has already run out.
“Already we’ve seen a number of chains collapse as a result of the problems being experienced.”
David Cummings, branch manager of Spicer McColl in Wisbech, said: “We had seven sales fall through in a single day because of this, leaving both vendors and purchasers in tears.
“One of the clients even had a letter saying their funding had been approved but was later told they wouldn’t receive anything.
“Other sales are taking up to 10 weeks longer, and more in some cases, because of the delays being experienced. It’s become an absolute nightmare.”
MyChoiceHomeBuy is provided by a consortium of eight housing associations, each of which is an equity loan provider in its own right. It is part-funded by the Government.
But agents of the MyChoiceHomeBuy scheme across the country were saying on their websites just weeks into the financial year that there was no more money available.
My4Walls, run by Yorkshire Housing, stated on April 30 that money for North and West Yorkshire as well as Humberside was no longer available; Moat, the agent for Essex, Sussex and Kent, said on May 8 that their funds had run out and Key Homes East, covering Cambridgeshire, West Suffolk, Bedfordshire, Milton Keynes and Northants, e-mailed their contacts on May 14 saying they too had no more money left.
Mr Smith added: “No-one disputes that shared equity schemes are to be welcomed and are clearly very popular, but nobody foresaw there would be no more money available so early in the financial year. This is a shocking position to be in, particularly since there is massive demand from people wishing to take advantage of low house prices.
“At the time of the Budget, there was criticism that an extra £80 million funding had been announced for the alternative HomeBuy Direct scheme to help people buy a brand new property – a far less popular scheme than MyChoiceHomeBuy.
“We’re now calling for more money to be available for people to buy any property, not just newly-built ones, to keep the market moving.”