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Government efforts to help FTBs are 'valueless'
18 April 2008 10:30
A specialist broker has lambasted the government's efforts to help first-time buyers (FTBs) onto the property ladder, arguing that what they really need is lower house prices.
Last week, the government announced that borrowers taking out mortgages as part of its Open Market HomeBuy (OMHB) scheme would be able to obtain grants of up to £1,500 to put towards costs such as product charges and solicitors' fees.
Yet Firstrung CEO Paul Holmes has countered that this measure will have scant effect, alleging that the grant is in fact merely a small discount on overpriced properties and that what the government is doing is seeking to protect itself and the market, not FTBs.
He asserted that the government is now relying on FTBs, having previously vowed to build up to 300,000 homes a year only to see confidence in the market dip, adding that, having allowed market forces to rein in the sector, it should not now seek to interfere.
Mr Holmes also warned participants in OMHB that, if the value of their homes drops after they have bought it, it is they who will suffer, not the government, although he concluded that what FTBs really need now is a 20 per cent correction in house prices.
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