The London housing market is being badly distorted by the Help to Buy scheme which is pushing prices up for first-time buyers, independent estate agent James Pendleton has warned.
Analysis by James Pendleton shows 83% of new build homes sold between £575,000 and £625,000 in seven key areas achieved less than £600,000.
Lucy Pendleton, co-founder and director of James Pendleton estate agents, said: “By introducing a Help to Buy threshold and axing Stamp Duty slab tax, the government has simply replaced one disruptive line in the sand with another.
“These hurdles placed at arbitrary price levels have always had a distorting effect on the market and that’s what we are seeing now.”
The limitations of the scheme only applying to properties worth up to £600,000 is squeezing the market, creating a vacuum in properties selling between £600,000 and £625,000.
Pendleton added: “This may cause problems when these new builds are sold on, as they will no longer be available under Help to Buy and sellers won’t benefit from the extra demand the scheme generates.”