Long-term tenants moving out of rented accommodation in favour of buying their own home via the government mortgage guarantee scheme will cause a glut of properties onto the market,
The Government announced last week that it was bringing forward the launch of the second part of Help to Buy, the scheme launched in April to help first-time buyers onto the property ladder.
Chesterton Humberts is confident that the scheme will prove attractive enough to tenants to achieve the Government’s aim of encouraging them onto the housing ladder and out of rented accommodation. However, this will create more competition between landlords eager to secure good quality tenants and is likely to push average monthly rents down.
The opposite is expected for the sales market, as the scheme will bring more buyers into the market and increase the competition for properties, thereby pushing property values up. The impact is expected to be felt especially in areas of London popular with younger buyers and with a good stock of flats such as Docklands, Islington, Battersea and Fulham.
Richard Davies comments:
“Whilst I am confident that Help to Buy will be of great benefit to a large number of first time buyers, I am concerned that many people are not fully aware of the details of the scheme and how it works. Before applying I recommend buyers to seek independent expert advice to make sure they understand the terms and conditions of everything that is involved.”
“More landlords may find their tenants giving notice as they move away from the private rented sector and into home ownership. Dependent on the scale of first time buyers taking advantage of the Help to Buy scheme, this could seriously impact the number of rental properties coming to the market for re-letting which could in turn see rental levels fall. Chesterton Humberts are able to advise landlords on current market conditions and rental levels to ensure that their property is let quickly, efficiently and without extended periods of vacancy.”
