Spicerhart boss Paul Smith is predicting a rise in transactions over the next year of between 10% and 15% because of the second phase of Help to Buy.
Another agent, Brendan Cox who heads up Waterfords with branches in the south-east, said it was “quite possible” that the launch of the scheme will fuel a housing boom.
Meanwhile, the Bank of England’s Financial Policy Committee has noted concerns about the lack of supply.
The mortgage indemnity scheme, which had been due to launch in January, is to start next Monday. Borrowers will be able to apply for 95% mortgages, although they will not be able to complete on their purchases until the New Year.
Cox said the scheme would help first-time buyers and also owner occupiers trapped by negative equity.
He said: “Questions are being asked as to whether this will fuel a housing boom, and the answer is that it is quite possible. If people who were previously unable to buy are unleashed on to the housing market, this is bound to send a ripple effect up the chain.
“Stock levels remain low and this new dimension could further increase prices.”
Cox also predicted a flattening of rents, saying tenants could take the opportunity to get on the housing ladder. But he added that in the Hampshire, Surrey and Berkshire areas where his firm operates and where the average first-time buyer property costs over £200,000, raising even a 5% deposit would be beyond the reach of many tenants.
At Spicerhaart, Paul Smith said that the scheme will “undoubtedly” help first-time buyers by reducing their required deposit from an average of £33,948 nationally (and over £60,000 in London) to £7,218 nationally (£12,800 in London).
In 2003 there were 369,600 FTB loans, according to the Halifax. Now they account for only around 240,000 per annum in the context of a much reduced total market.
Smith said the influx of new demand from Help to Buy will also encourage ‘second steppers’ to put their own homes on the market in order to trade up.
Smith said: “The new Help to Buy scheme will start a demand and supply chain reaction further up the housing ladder, generating a much-needed improvement in the number of property transactions nationwide.
“We predict that property transactions will rise by 10-15% over the next 12 months, which will moderate the current excess demand in the market, taking the pressure off house prices. We see house prices rising only moderately in the coming months.”
In the minutes of its September meeting, the Bank of England’s Financial Policy Committee said there was “uncertainty about how rapidly housing supply would respond to any rise in demand”.
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