A report from telegraph.co.uk has suggested that there are rumours that the Government may consider abandoning its HomeBuy Direct Scheme for first-time buyers, which has been in operation since March this year. Yesterday (16 July), it was disclosed that the scheme has helped only 215 people out of a total target of 18,000 first-time buyers.
The scheme announced last September, was designed to enable people gain a rung on the property ladder by securing a loan against the property comprising up to 30 per cent of the purchase price. The finance is to be shared 50-50 between the Government and the developer.
Buyers whose income is under ?60,000 a year are eligible for the loan, which is interest-free for the first five years but carries an annual fee of 1.75 per cent. After this, the buyer is charged interest at inflation with a further 1 per cent.
The Government has intimated that the scheme needs more time to take effect as the process for people buying new property usually takes around three to six months on account of the time lag involved in purchasing a home off plan. It also said that there were a large number of people waiting to take up the offer.
According to a spokesman for Barratt the home builder, 30,000 people have expressed interest in the scheme and at present 500 people are going through the process.
As part of its package of ways to help housebuilders in the budget the Government topped up its funding to ?400 million from its original announcement of ?300 million for the scheme. A spokesman for the Home Builders? Federation, John Stuart, said: ?We?re heading in the right trajectory as the Government calls it, the right direction, but I can?t guarantee that we?ll get to the full 18,000.?
