Help Urged For First-Time Buyers
The New Homes Marketing Board has asked the government to initiate a tax-free savings scheme with bonuses to help first-time buyers cover deposits, stamp duty, legal and removal fees. Such a scheme, it says, will help boost the mortgage market, and encourage people back into savings habits.
Homebuilders have been suffering in the house-buying slump, and have slowed down their house building programmes. After all, there’s not much point in building houses if there is no one to buy them.
Now, housebuilders are asking the government to assist first-time buyers by setting up a tax-free saving scheme. This, hope the builders, will improve liquidity in the dried-up mortgage markets.
The trade body, New Homes Marketing Board (NHMB), led by chairman David Pretty, has been lobbying Chancellor Alistair Darling to set up a national Home Deposit Savings Scheme. This would be for new buyers to save their money for a deposit, assisted by tax breaks worth up to £5,000. Would-be buyers would be greatly assisted by such a scheme in times like these when deposits demanded by lenders have increased during the credit crunch. It would not cost the government too much, targeting as it would only a relatively small sector of the housing market – but vital to re-vitalising it.
In such a scheme it is envisaged that savers would be allowed up to five years to make a saving to a maximum of £20,000. Then, on top of this would be added an extra 25% as a tax-free bonus, taking the maximum possible saving up to £25,000. This would be used for a mortgage deposit, stamp duty, legal fees and removal costs as required.
Banks and building societies would administer such schemes.
The NHMB originally suggested the scheme be set up back in March and valuable months have been allowed to slip by without action. Mr Pretty, who is a former chief executive at Barratt Homes, urged the government to take action, saying that the downturn in the housing market made the requirement for such a scheme “urgent and immediate”.
Mr Pretty also believed that the scheme would be a great boost for beleaguered first-time buyers and would encourage a return to saving habits – something lost in the days of easy credit.
