The £3.5 billion Help To Buy scheme announced as part of the Chancellor’s Budget is designed to assist people to get a foot on the property ladder by increasing the availability of mortgages to people who cannot afford a large deposit.
Under the scheme, the Government will offer a five year interest free loan of up to 20% of the value of new homes to top up the deposit put down by buyers, provided that they can put down a 5% deposit.
A second strand of the scheme called “Mortgage Guarantee”, will see another £12billion invested by the Government as an insurance to lenders who provide better mortgages to buyers where the loan to value ratio is high.
The scheme is expected to boost lending for up to 500,000 buyers, and will provide a timely boost to the construction sector.
But Landlord Assist feels that the scheme could have been extended to property investors to encourage more landlords to enter the market and provide a greater choice of rented accommodation.
Graham Kinnear, manager director at Landlord Assist, said: “Many landlords will be pleased at the projected cut in corporation tax. But we’re disappointed that the new housing schemes introduced by the Government have not been extended to buy-to-let landlords, who in recent years have played a key role in helping to address the housing shortage.
“There is still a huge supply and demand imbalance in the rental market and this needs to be addressed. Boosting house building is one part of the answer but we believe the Chancellor missed a great opportunity to boost the sector by not extending the new scheme to landlords. A lot of people nowadays prefer the flexibility of renting, so allowing landlords to take advantage of the scheme would have made perfect sense by helping to address the shortage that currently exists.”
Stephen Parry, commercial director at Landlord Assist, added: “An increase in the number of properties in the rental sector would boost the economy, increase choice for tenants and regulate rental prices. We had hoped the Government would have done more to promote the sector.”