Legal News

The government has defended its Help to Buy mortgage scheme, after official figures show that in many areas of London, not a single buyer has bought under the Help to Buy scheme.

However, Minister for Housing Brandon Lewis said that Help to Buy was “a great success”:

“It’s brought confidence back to the housing market – and is one of the reasons why house building is booming in London,” Mr Lewis said.

New figures show that in 20 areas of the capital, no one has bought under Help to Buy – which is designed mainly for first-time buyers wishing to buy a new-build property and also families wishing to buy a larger home.

Shadow Minister for Housing Sadiq Khan – MP for Tooting in southwest London – said:

“Those benefiting most from this government are foreign oligarchs who can pay extortionate London prices – not ordinary Londoners who can’t afford to buy their own homes.

“Everyone should have a realistic chance to own their own home – the government likes to pay lip service to this aspiration, but action speaks louder than words.”

The first phase of the Help to Buy scheme was launched in April 2013 – and the second phase for first-time buyers in October 2013. Under the scheme, the government allows first-time buyers to purchase a home up to the value of £600,000 with deposits of just 5%. The government underwrites part of the mortgage up to 20% of the cost of a newly-built property.

The scheme was intended to help kick start the property sector and house building, after the slump which occurred following the 2007 banking crisis and 2008 credit crunch, when house building dwindled and first-time buyer initiatives – such as 95% or 100% mortgages – were stopped by lenders.

Although the government has hailed the scheme as a success, both lenders and the Bank of England have expressed concern that once interest rates rise some homeowners who bought under the scheme may not be able to afford to repay their mortgages.

However, in 20 constituencies in the London area, not a single homebuyer has bought under Help to Buy, according to the new figures.

The areas cited include traditionally low- income areas where first-time buyers might look for a home to buy, including Lewisham West, Tottenham, Tooting, and Brent Central. Other areas where no one has bought under Help to Buy are Hackney South and Shoreditch – two areas which have recently become “gentrified” and where house prices and rents have rocketed.

Labour has also said that the figures show in 12 other constituencies in London, fewer than five homebuyers have bought under Help to Buy, including Croydon Central, Streatham, Ealing North, Enfield Southgate and Hammersmith.

The government has said, however, that data shows Help to Buy has been used by nearly 3,000 homebuyers in London alone.

Duncan Lewis Housing Solicitors

Duncan Lewis solicitors are a leading firm of housing solicitors and can advise homeowners on housing law, including debt management and mortgage repossession.

Duncan Lewis housing solicitors can also advise rental tenants on a range of legal matters, including:

• Disrepair of rented property
• Housing benefit
• Landlord & Tenant disputes
• Local Authority housing
• Unlawful or malicious eviction.

Duncan Lewis is also one of the UK’s leading providers of Legal Aid services.

For expert advice on housing law contact Duncan Lewis housing solicitors on 020 7923 4020.