Over one third of potential first-time buyers have never heard of the FirstBuy scheme, and of those that have, 22% said they did not understand whether it would help them or not.
According to research by Rightmove, 37% of would-be first-time buyers did not know the Government’s shared equity scheme existed, although 45% said they thought they might now be more likely to get on the housing ladder.
Rightmove director Miles Shipside said of the scheme, which was announced in March and fully launched in September, that more needed to be done to drive awareness.
Rightmove has a FirstBuy micro-site which helps explain the scheme, which allows first-time buyers to purchase a new-build property with a 5% deposit. A further 20% deposit is provided in the form of a five-year interest-free loan jointly funded by the Government and the house builder.
Rightmove did similar research in April, which found that one-third of first-time buyers were unimpressed by the scheme as they did not wish to buy a new-build property. This proportion remains unchanged at 32% six months on.
Shipside said: “It has to be remembered that this scheme is limited to 10,500 purchases of new-build only properties.
“However, any initiative which helps first-time buyers to get a foot on the property ladder should be welcomed.”
He said the Government could consider extending FirstBuy to the wider housing market.
“If the scheme can have the success that our survey suggests, then the Government could consider extending the current scheme as well as something similar to assist the wider housing market.”
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Comments
Brum agent: "It would be better for all buyers, including first time buyers if the house builders just adjusted to the current levels."
And it WILL happen, I am sure.
It'll be the same week that Ferarri give Gloria Andazula the Contract to sell their new cars for ten grand a shot....
Based upon your comments on this site, I seriously doubt that you are actually an Agent.
Brit1234. Oh, dear - something else to set off your hair trigger...
"I have a civil engineering and building background and from this am not interested in these smaller, poor quality and overpriced newbuilds."
You mean you were a teaboy on a building site while you were doing your Economics 101 degree, no doubt.
"I'm a potential first time buy and have looked into this scheme and others. My conclusion is it is a scam to keep property prices artificially high and only benefits the builders share holders. I would not touch one of these things"
MAKE YOUR MIND UP - either you wouldn't touch it with a bargepole because you don't want a new-build shoebox OR because the scheme is, in your conclusion, a scam. Which is it to be? You can't have both.
"It is common knowledge that you can buy one of these First Buy properties cheaper from the developer without the scheme."
REALLY? So - walk me through this, please - make sure I've got it right. IF you go in to somewhere with a pot of money to buy something, then you can buy that something cheaper than if you ask the seller to lend you part of the money to buy it off them?
Blimey! Wonders never cease...
"I recommend first time buyers to ignore first buy and just raise a bigger deposit for a old home."
Well - goody for you. Maybe they will listen to you - maybe they won't. MY money is on at least ten and a half thousand buyers ignoring your ill-informed and badly thought-out ramblings.
Cue 'donnie' and his special friend...
Would you take advice on how to drive from someone who hadnt got a licence?
My brother tried that and I threw him out the car on the side of a dual carriageway.
I'm not saying he doesnt have valid points and opinions, but I certainly wouldnt take advice from someone with a vested interest in low prices and a cemented stance on not buying, like Brit's.
“So, if you are a first time buyer, why are others listening to your advice? Not exactly going to be a wealth of experience and a font of knowledge are you buddy?”
Are you suggesting that only people that have been scammed are qualified to talk about avoiding scams, not the people that avoided them?
As it happens in your case I’m sure your fine, you bought 6 years ago when prices were no doubt high, but not as silly as they got a few years later. But first time buyers buying today are being asked to pay practically 2007 peak prices, and these scheme is being used to help keep the prices at this level. It would be better for all buyers, including first time buyers if the house builders just adjusted to the current levels.
"the 20% equity loan share is jointly held by the government and the builder with the deal, so the builders have a considerable stake invested in the scheme"
Which is probaly the only reason why it exists at all in these austere times.
My point is: why should someone have to buy a new build for example £120k when they could buy a nearly new build around the corner for £105 and avoid 10-15% depreciation just for buying new. There's a reason banks have recently been asking buyers to stump up larger deposits when buying new - because they don't think they're worth it.
I know there have been price drops on 1980s semis as well as victorian terraces (as well I should as I own one) but in this areas those drops are more in the 12-18% range rather than the 30% we are seeing on the new builds.
I'm not going to get nasty with Britt but to answer your point, not every FTB wants to wait for the bottom of the market before buying. Some have differing circumstances to you and may want or need to buy sooner (for example I suddenly wanted to buy my first house when I found out my girlfriend (now wife) was pregnant).
House prices are high and whilst we might see some short term falls I think in the long run they will remain high. There should be schemes available to help FTBs buy if they want to - not everyone is luck enough to have access to the bank of mum and dad. But they shouldn't be so restrictive that they only allow buyers to live in certain parts of town or live in certain types of houses.
Country Lass: I believe the simple truth is that the New Homes industry asked for it and worked with the Government to comeup with a package - and the Estate Agency world didn't!
Don't forget, the 20% equity loan share is jointly held by the government and the builder with the deal, so the builders have a considerable stake invested in the scheme. Do you think that LSL would do the same? ;o)
Damn, I've just dropped my crystal ball! Ask me in 5-10 years Brit.
I've lived there for 6 years now, bought just before the prices went crazy, so I'n not sure there will actually be a problem.
So, if you are a first time buyer, why are others listening to your advice? Not exactly going to be a wealth of experience and a font of knowledge are you buddy?
The question s would you recommend it in 5-10 years time when you have to pay back the loan as well when your property is valued less than when you purchased.
I'm a potential first time buy and have looked into this scheme and others. My conclusion is it is a scam to keep property prices artificially high and only benefits the builders share holders. I would not touch one of these things
I have a civil engineering and building background and from this am not interested in these smaller, poor quality and overpriced newbuilds.
I recommend first time buyers to ignore first buy and just raise a bigger deposit for a old home. It is common knowledge that you can buy one of these First Buy properties cheaper from the developer without the scheme.
I'm not sure if I like the fact it's ONLY for new builds now though. I know what you said about in a good market, everyone loves new builds, but I've never really been a fan. They can be too coulless, the Ikea flat-pack version of a house.
If they made it available for new builds AND properties built within, say, the last 30 years or so that would be different. You're widening the market sector available, whilst hopefully cutting out ones that could have problems caused by the age.
Country Lass: "...I used it and I would've recommended it to everyone if I could. I did recommend it to some other FTB's and they seemed pleased as well.W
Thanks - you've reinforced my point exactly!
YOU recommended it. YOU would recommend it NOW.
NOT "The NAEA promoted it". NOT "The RICS..." - and NOT Connels/Your Move/Jones & Co etc taking out a page in the local property rag promoting it to the readers - or even bothering to put it on their website.
Sad, really. So little input required for so much potential gain.
Lucky for your then employers (I'll include you also, PbroAgent) that you at least tried when they didn't...
I'm still unsure as to why some people seem to not like the old Homebuy scheme, I used it and I would've recommended it to everyone if I could. I did recommend it to some other FTB's and they seemed pleased as well.
PbroAgent: This is why I enjoy and engage in reasoned debate with HPCers, Agents et al. The divergence of opinions on what is essentially one primary subject is fascinating - and dependent upon the individual's personal agenda as far removed as chalk and cheese!
A lot of what you say I agree with. If I were still a Resi Agent then I may well have been singing from the same hymn book.
But for the sake of some balance, let's look 'wider picture' in our continued banter...
"...there are many people in the new developments around Peterborough who didn't realise that buying a new house is like buying a new car and suffers similarly from depreciation..."
Same can be said about a 70s semi or a Victorian terrace to name but two examples, surely? That is down to the craziness of buying, and the history of the market. But a house only suffers depreciation IF it is sold for less than it was bought for - and in the vast majority of cases we all know that people will time their sales accordingly to avoid this. If this is not possible for whatever reason, then you takes the rough with the smooth - as it is highly unlikely that the next purchase, made at or near the bottom of a market, will make up for the failings of the previous - PLUS SOME!
I have said before that a wise old gaffer of mine always coined the phrase "you buy and sell in the same market" which is generally true with 'yer average' buyer. I will use my own example - we bought our first home in 1980 for £8k - sold it two years later for £7500 as the area nose-dived (no doubt due to my presence...). The same property now would be well over £100,000. I should have stayed and made money - and bought a few more in the street while I was on! Crazy or what! But no - we moved on. Since then, I have doubled my money on our second property, and theoretically tripled my money on the third - not that I will be testing that theory soon I hope.
"We didn't advertise it externally, I worked for a coporate at the time and I had very little say in our advertising, but rest assured that we spoke about it to many FTBs who crossed our path."
All very good, mate. But at that stage you were trying to push water (being polite... ;o) ) up a hill, weren't you! The fact of the matter is that if your short-sighted employers, or the RICS/NAEA who they were no doubt Members of, had been prepared to spend some of the monies they collect year on year into actually MAKING THIER MEMBERS JOBS EASIER by promoting some of the Government assistance on offer to buyers, then you may well have got: more potential buyers through your doors; more viewings; more offers; and more "SOLD" signs up - which as we all know breeds more "SOLD" signs...
"...newbuild schemes exist is due to organised lobbying and promotion by the builders who I am sure only have themselves at heart."
Okay, mate - today's "No Sh!t, Sherlock" award is yours... ;o) That being said, if dumbass builders work out for themselves that unless they advertise deals no one will know they are there for the grabbing, how come clever Chartered Surveyors etc don't grasp the concept?
"One of my continual frustrations with the estate agent industry is that it is too fragmented and we have no cogent voice to promote another point of view - but I'll leave it to others to bemoan the faults of the NAEA and others."
See Trevor Kent. He's the most cogent voice the Estate Agency - nay, PROPERTY - industry has had in decades. He has decided that the NAEA no longer bangs the drum. Maybe Trevor's vision of an industry flagbearer is needed now - and he might be just the man to drive it forwards...
And if he needs a 'wingman' or two for his committee, there are a number of folks who post on here that I would gladly propose and second! ;o)
At the risk of sounding like an HPCer, there are many people in the new developments around Peterborough who bought at or close to the peak and didn't realise that buying a new house is like buying a new car and suffers similarly from depreciation. This is particularly bad as we have here one of the largest new build developments in Europe, with enough land with planning permission for houses to continue being built for at least the next decade and probably much of the one after that as well. As a consequence we are seeing real drops in value on what were previously new builds of up to 30% in some cases compared to what the vendor paid for the house new, which comes from that initial depreciation hit and the subsequent fall in prices. This means that many vendors are trapped with little, no or negative equity, so I sure you will forgive me if I'm a bit down on new builds.
"What about all the follow-on spend on a new home?"
But that's my point in a nutshell, it's just one home - it could have been a chain of eight.
" "Three more deals for the likes of me to get paid commission on..." And THAT is the real point here, isn't it, matey?"
Whilst I won't deny that more commission would be nice, it is a resulting consequence of an increase in sales activity and in the same way in which my family would increase it's spending, so will others who would be similarly effected.
"Not really. The new scheme is being promoted primarily by the BUILDERS, not the Government. They stand to gain - so they are spending money to promote it. When you had the possible use of OMHB, did you advertise it in your press adverts, website or on property particulars? Did anyone else in your patch that you know?"
We didn't advertise it externally, I worked for a coporate at the time and I had very little say in our advertising, but rest assured that we spoke about it to many FTBs who crossed our path.
You are right though that the only reason newbuild schemes exist is due to organised lobbying and promotion by the builders who I am sure only have themselves at heart. One of my continual frustrations with the estate agent industry is that it is too fragmented and we have no cogent voice to promote another point of view - but I'll leave it to others to bemoan the faults of the NAEA and others.
PbroAgent: "As with any of these things, they need to be promoted right by government and Openmarket Homebuy just wasn't promoted at all - where I had buyers who used it they seemed to be delighted that they could choose any property,"
Not really. The new scheme is being promoted primarily by the BUILDERS, not the Government. They stand to gain - so they are spending money to promote it. When you had the possible use of OMHB, did you advertise it in your press adverts, website or on property particulars? Did anyone else in your patch that you know?
Here 'Oop North', it never got as much as a whisper - except as a column inch in the local property paper's editorials once or twice...
"Three more deals for the likes of me to get paid commission on..." And THAT is the real point here, isn't it, matey?
"Three lots of buyers per chain going to Ikea and B&Q paying VAT on the things they buy - hiring tradesmen to change things in the houses they've just bought."
What about all the follow-on spend on a new home? Carpets, curtains, blinds, new furniture, grass and plants for the Somme-like garden... Ikea and B&Q LOVE new-builds, and some chains even provide discount vouchers to builders to give to their buyers!
"Lets stimulate the economy without tempting FTBs into overpriced new hutches..."
I find it hilarious that when everything is selling hand over fist, Agents clamour to builders crying to sell their "beautiful new properties". As soon as the market turns, they become "hateful cardboard gerbil-cages". God - I hope I was never like that when I was an Agent...
"The resales will still be there in a few years, besides resales in a few years aint going to help us now."
Will they? Not if they can't sell them, they won't. and as far as looking to the future - at this point in time the future should be where you are concentrating on just as much as today.
Mate - 10,500 homes; spread across almost a quarter of a million square kilometers; over a two (or more...) year period.
That ain't gonna hurt your business ONE BIT.
Just my opinion, of course... ;o)
Andrew, You are clearly desperately concerned that the truth will be damaging for you.
But since you have so much unsold stock, why not realise that by letting everyone know how overpriced a house is, you will have an easier time convincing a vendor to lower their price.
I for one would welcome the move.
@Andrew
I don't really understand your issue with the marketing date. What have you got to hide? Other than a load of stock that you over-valued and can't shift of course.
Always valued your opinion PeeBee ;ob As with any of these things, they need to be promoted right by government and Openmarket Homebuy just wasn't promoted at all - where I had buyers who used it they seemed to be delighted that they could choose any property,
My point is: what's the average chain length? Three, four perhaps? If it's three transactions per chain, that's three lots of stamp duty, three lots of VAT on fees, six lots of VAT on solicitors fees, three lots of VAT on surveyors fees. Three more deals for the likes of me to get paid commission on (which we will pay income tax and NI on before giving it to our wives to spend for us). Three lots of buyers per chain going to Ikea and B&Q paying VAT on the things they buy - hiring tradesmen to change things in the houses they've just bought. Generally adding confidence and wellbeing to the whole economy perhaps encouraging others to come out of their shells to buy and sell, all the while adding much needed taxes to the exchequer.
The new home builders don't need first time buyers to buy their overpriced cardboard boxes, many of those around Peterborough being built are large family homes and not suitable for a (once-upon-a-time) typical 20something to buy. The properties at the top of chains are always either a divorce (two new households now needing to spend cash to furnish their new homes); a probate (ooh a load of free cash off grandma for me to go and spend in the BMW garage = more VAT) or a new home anyway.
Lets stimulate the economy without tempting FTBs into overpriced new hutches where nothing needs doing except a bit of snagging. The resales will still be there in a few years, besides resales in a few years aint going to help us now.
PbroAgent & burf: I am sure that 'donnie' will state that my input is not to be challenged and that I am the all-knowing etc etc (yawn...), however I will risk a post in response to what you are saying.
I would agree that FirstBuy should not be limited to the New Build market - however the previous scheme that was offered to the second-hand market was not exactly a screaming success, was it?
Look at a slightly wider picture than you currently are, though, for a second.
10,500 new homes to be sold. Building them would keep a workforce almost the size of the regular British Army in work for six months (were they all to be built at the same time, of course). Then come the resales. THOUSANDS of new instructions coming the way of Estate Agents up and down the country over the course of the next decade. Some for you; some for your competitors - ALL helping to keep Estate Agents in business.
I fail to see why you cannot accept that this would not act in some way, shape or form as a stimulation to the economy.
But, hey - that's just my opinion... ;o)
Dont worry about First Buy. Worry about what Rightmove are doing. Do you know that they have started adding the marketing date on the rental pages for your properties along with the actual number of days that the property has been marketed. They say home searchers have asked for it
My advice is that you should make an urgent complaint.
When I complained they told me it was good for agents as we would be able to get asking prices down. Watch out as they will be publishing the same on sales properties if we let them....They seem to have forgotten who is paying their fees....
Try getting through to anyone senior at Rightmove to discuss it!! Ive been told that it is to stop agenst leaving their properties on the list and that some agents have rung up to say they love it....Tim Bannister is the head of lettings and you should address your complaints to him. Ive been refused his address...
I think you will find the scheme is designed to help first time buyers get onto the property ladder and get straight into negative equity and still owe the goverment and builders that 20% that the property is overpriced by!!!!
Like PBroAgent said it would be much better if this scheme was opened up into the whole market and I for one would be snapping their hands off!!
I've always wondered how these schemes are meant to stimulate the economy. It seems to me that a scheme which helps builders sell to FTBs is designed solely to help the shareholders of the national housebuilders.
Surely a better scheme would allow FTBs to buy properties on the open market, helping to build chains, allowing more people to move, thence to visit B&Q for some new paint and DFS or Ikea for some new sofas and spend, spend spend on their homes whilst ooo... stimulating the wider economy?
Not to worry they ain't missed an awful lot!!