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Not enough new homes to meet demand
The new Help to Buy scheme, is, according to some commentators, helping to exacerbate the current problem facing the UK’s would be home owners by helping to outstrip the supply of available properties. It has been reported that property prices in the UK are rising at their fastest for more than a decade.
During September, when a large number of new buyers hit the market, UK property price growth was seen to reach an eleven year high.
There have been a lot of first time buyers taking advantage of the Government’s Help to Buy scheme, which is giving them a welcome first step on the property ladder. It is this entry into the market that has been the reason why the average house price has gone up, according to the latest Royal Institution of Chartered Surveyors (Rics) survey.
The survey says that 54pc of their members reported house price rises in September, the highest since 2002 and the total number of homes sold was at an almost four-year high with not enough new homes coming on to the market fast enough to satisfy the demand.
The Help to Buy scheme offers Government loans to borrowers in order to buy new-build homes with a smaller than average deposit of just 5%.
The Government recently launched its second phase of the scheme, to include others and not just first-time buyers.
Bank of England governor Mark Carney addressed concerns recently that Government stimulus measures may be guilty of stoking another property bubble.
He said the Bank is "acutely aware" of the potential threats and said action will be taken to clamp down on mortgage lending if needed.
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