More help needed for first time buyers, say property lawyers
16 Nov 09
ELPG solicitors want further initiatives from Government and lenders
First time buyers need more help to get on to the property ladder, according to the Edinburgh and Lothians Property Group (ELPG).
The group, which consists of five of the major legal players in the Edinburgh area’s property market – Warners, Neilsons, Drummond Miller, the Lints Partnership and Leslie Deans & Co – accounts for a quarter of all sales in the ESPC.
It reports today that, although house prices are rising and mortgage lending is on the up in Scotland, first time buyers are still being hindered when it comes to being able to finance their first property purchase.
Initiatives
ELPG is calling for new initiatives and funding to be made available for buyers at the lower end of the property spectrum, in order to boost the market further and encourage the recovery in property sales and prices to continue across Scotland.
Scott Brown, estate agency partner at Warners, explained that although there were encouraging signs in the market, many first time buyers were still finding it difficult because they required fairly sizeable deposits to put down on a new home. If they did not have this in place, there were very limited options available to help them make a purchase.
“Ideally," he said, "we would benefit from having a more simplified method for parents guaranteeing a mortgage for their children – as parents are more likely to be happy to stand as guarantors rather than to put down a hard cash sum for a deposit in the current climate. If there were also attractive rates for these sorts of schemes and, potentially, a definite exit period for the guarantors then it would help to make it more attractive for parents to help and therefore easier for buyers to get their first step on the ladder.”
LIFT limits
The group also highlights the Low-cost Initiative for First Time Buyers (LIFT) scheme run by the Government as another area that could be used to help more young househunters into the market.
Angus Macpherson, managing partner of Drummond Miller, said: “The Government has run the LIFT scheme for some time now and it has been a great success in helping to allow first time buyers who don’t have huge deposits in place to make a purchase.
“However, the problem with the scheme is that it runs out of its annual allowance of funds very quickly, meaning that many buyers are left disappointed. If the Government could find more money to put into the scheme, it would greatly help to encourage more first time buyers to purchase a property and – ultimately – will help the rest of the market.”
Mr Macpherson added that if just one first-time buyer purchased a home at the bottom of the ladder, it could spark a further six or seven purchases further up the chain.