First-time buyers using a government-backed Help to Buy equity loan scheme are paying up to 22 per cent more for their homes, a new report says.
According to research, developers are using the scheme to push up property prices, the opposite of what is supposed to happen. It’s intended to help potential homeowners onto the property ladder by lowering their mortgage.
Up to 20 per cent – or 40 per cent in London – of the price of a new build property, is intended to be interest-free for five years.
But it also leaves room for developers to push up prices for buyers eligible for the scheme.
On average, using the equity loan adds an extra 10 per cent to property prices in the 12 months to September 2019, according to home-moving service reallymoving.
And Paula Higgins from the Homeowner’s Alliance said: “It’s important for first time buyers to do their research before being ushered into a showroom.”
Here the consumerwatchfoundation reports on a company going against the trend with its unique user-friendly RENT TO BUY scheme which can guarantee prices: