First-time buying plight high on political agenda

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David Cameron has pledged more help for first-time buyers if his party is re-elected but is it a vote winner?

Compared to the hot topics of war in the Middle East, immigration and the economy, the plight of the first-time buyer appears less pressing.

But the Conservative Party may have pulled a master stroke by putting this issue high on the agenda at its conference this week.

David Cameron promised enticing new initiatives to help first-time buyers if the Tories are re-elected. They include building 100,000 homes on brownfield land, some of it released by the public sector. First –time buyers under the age of 40 would be able to buy a property at 20 per cent below market value and would also be eligible for a 20% Help-to-Buy equity loan of 20 per cent leaving them to pay a five per cent deposit.

Exemption from taxes such as the community infrastructure levy and a requirement to build social housing on the sites would incentivise developers to build the new homes.

Mr Cameron added: ““They can’t be bought by foreigners, they can’t be bought by buy-to-let landlords, they can’t be flipped round in a quick sale. They can only be bought by hard working people under the age of 40.”

Communities Secretary Eric Pickles also unveiled a “Rent to Buy” scheme with loans totalling £400 million for housing associations and social landlords to build 10,000 homes. The properties would be let at 20 per cent less than market value giving tenants a chance to save for a deposit. After seven years, they would have the opportunity to buy the property.

Making home ownership more accessible to the young generation could be a vote winner, according to estate agent Mark Manning, of Manning Stainton.

“Of course it’s a political move but I wouldn’t question the logic of it. It seems like a good idea. The current Help-to-Buy scheme has certainly worked very well. Developers would have to build smaller properties to make them affordable for first-time buyers and this could mean more apartments, but my main concern is that the scheme might be short-lived. It needs the right financial backing to succeed.”

A new report from the National Association of Estate Agents reveals how acute the first-time problem is. Although the number of first-time buyers grew from 20 per cent in July to 28 per cent in August, the number of first-timers under the age of 30 is at all-time low. They represented just three per cent of house buyers last month. The NAEA report also found that 90 per cent of first buyers were couples, with just seven per cent buying alone.

It’s an issue that affects millions of us directly and indirectly, a fact observed by policy makers. We are a property obsessed nation and home ownership is something we aspire to. Even if you have a “let them rent” attitude, first-time buyers are the bottom of the property food chain so the rest of the house owning public needs them to feed the market. Then there are the parents and grandparents who have been able to buy their own home and would like their offspring to do the same. Those coping with the impact of boomerang kids who can’t afford to flee the nest are especially keen to a solution to the problem. Statistics show that one in four young people still lives at home.

Mark Manning says: “ We have seen a 15 per cent rise in the number of first-time buyers compared to the same time last year, but they are usually over 30 and most buy as a couple, whereas ten years ago it wasn’t uncommon to have young people buying alone.”

He advices those looking to get a foot on the property ladder to look for lower priced, less desirable areas on the fringes of their preferred location.

Places like Chapeltown, close to fashionable Chapel Allerton and to the city centre, is one to watch in Leeds, along with Headingley and Far Headingley, where students are steadily being replaced by young professionals.

“We’ve had quite a few record sales in Chapeltown recently, including one house on Oak Road that went for £360,000. There are some lovely, big old terraced houses there and we’ve noticed buyers from London are especially interested in the location and the value for money,” says Mark.