Building societies claim the Prime Minister’s £3m pledge to help individuals get on the pro-perty ladder will make little difference to the majority of first-time buyers.
The funds will be released in £1,500 packets to key workers such as nurses as well as first-time buyers who are eligible for assistance under existing Open Market HomeBuy guidelines.
The money is intend-ed to help buyers meet legal and moving costs.
Steven Marks, lending operations executive at Newcastle, says: “Any measures designed to help first-time buyers are welcome but the number of consumers targeted by affordable housing schemes is small so this funding initiative will make little difference to the market as a whole.”
He adds that if the government is serious about helping first-time buyers it should review Stamp Duty, which is a big problem at the lower end of the market.
Bev Newman, intermediary sales manager at Stroud & Swindon, says S&S has been lobbying the government to raise Stamp Duty thresholds to ease the pressure on first-timers. She says: “Instead of schemes like this, government policy would be better aimed at addressing the problem of Stamp Duty for first-timers.
“This initiative is tinkering at the edge, offering assistance to a small number of buyers.”
A Treasury spokesperson says: “The government doubled the starting threshold for residential Stamp Duty in the 2005 Budget and increased it again in 2006, so around two-fifths of home buyers will pay no Stamp Duty this year.”