Gordon’s Open Market HomeBuy Scheme A Complete Failure
It seems that Gordon’s plans to help first time buyers onto the housing “ladder” have been met with total and abject failure, after the Telegraph revealed today that only 100 buyers have taken up the offer of the key workers scheme. The Government had targeted 6,500 completions a year, and yet has managed only a fraction of that since the scheme was launched over a year ago, in late 2005. Seems as though Gordon may be planning a rescue strategy in his Budget speech due on March 21st, although with the failure already there for all to see it’s hard to believe he can do much good to rescue the situation now. The article has more:
Just 100 first-time buyers have taken out mortgages under the Government’s pioneering shared-equity home ownership scheme with the private sector.
The Chancellor unveiled “Open Market Homebuy” with much fanfare in late 2005, setting a target of using the partnership to lift 20,000 key workers onto the housing ladder by 2010. It was officially launched five months ago, on October 1, with building societies Nationwide and Yorkshire as well as investment bank Morgan Stanley, under the Advantage brand. Halifax, the UK’s largest mortgage provider, has still to join despite being hailed as a flagship member. Even so, Gordon Brown wants more private sector involvement and is expected to launch “a new competition” in the Budget on March 21.
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A spokesman for the Communities and Local Government department said the scheme has had an “encouraging start” with 6,400 keyworkers qualifying for Open Market Homebuy. He added that a further 700 home purchases should be completed shortly.
For the Government to hit its target, however, it needs 6,500 completions a year and it is already raising its goals.
David Castle said,
February 28, 2007 @ 12:09 pm
Greetings, we are Homebuy Brokers and are starting to feel like the poor Companies who invested strongly into the HIPs (Home Information Packs) sector, only to find the goal posts keep moving.
The Homebuy agents are all hard working and dedicated individuals and are a pleasure to work with. It’s not really the schemes themselves that are at fault. We simply do not have enough Lenders and being restricted to 3.5 times income on Open Market Homebuy limits the property value. Bearing in mind the scheme is designed to help those who cannot get onto the home ownership ladder in the traditional manner enquiries are from clients in higher valuation areas !
Now Social Homebuy - Now that is something that we urge you to blog on.
Ruth Kelly has announced that she is set to announce a 10% starter Mortgage for Council Tenants who cannot afford to buy all of their homes. Sounds good - £300,000 valuation - buy 10% and buy more as you go on. Wrong - very very wrong. Within the legislation on Social Home the Stamp Duty is payable from outset. So on that £30,000 initial mortgage advance a further £10,000 has to be found - upfront!!!! - 1 The Lenders are not interested and 2 Nor are the General Public once they start the ball rolling.