The Government’s shared equity scheme, FirstBuy, would be of more benefit if it was not limited to first-time buyers, according to mortgage brokerage John Charcol.
Last week, the Government announced a raft of housing and planning measures in an effort to kick-start the economy.
Among the many proposals was an announcement that the Government would inject a further £280m into its shared equity scheme, FirstBuy, to get a further 16,500 first-time buyers onto the housing ladder.
The £210m FirstBuy scheme was launched in June 2011 with the aim of helping around 10,000 borrowers who could not afford to save for a large deposit secure their first homes. Under the scheme, home builders and the Government offer first-time buyers a low-cost loan of up to 20 per cent of the purchase price of a new-build property, which is interest free for the first five years, with the borrower needing only a 5 per cent deposit.
But John Charcol senior technical manager Ray Boulger (pictured) says: “The ultimate cost to the Government of this scheme is tiny, possibly even nil, but it drives clear economic benefits in the wider economy. What better way for new housing minister, Mark Prisk, to make an easy hit in the first week of his new role, whilst at the same time helping a wider range of struggling home buyers, than by extending its scope? All it needs is for the product to be given a new name.”