First-time buyers back state scheme

First-time home buyers have backed the Government's scheme to encourage them on to the property ladder, with new research finding 40 per cent were now more likely to take the plunge.

A month after the announcement of the "First Buy" scheme, online property portal Rightmove found two in five potential first-time buyers were "more likely" to buy and half of those "much more likely".

The scheme allows first-time buyers to purchase a newly-built property with just a 5 per cent deposit, and a further 20 per cent deposit in the form of a five-year interest-free loan funded by the Government and the housebuilder. Miles Shipside, director of Rightmove, welcomed the "strong support for deposit raising initiatives".

He said: "First-time buyers are the life blood of the volume housing market and the scarcity of this buyer group in the current market has been keenly felt. However, this survey shows that many are ready and willing to purchase, they just need the leg-up that a scheme like First Buy can provide."

Yet of the 3,000 would-be first-time buyers quizzed, a fifth said they did not feel the package was attractive to them. Many were put off by the scheme's limitation to new build properties, with over a third of first-time buyers saying they were not keen on the purchase of a new home.

Mr Shipside said: "A major issue in the current market is the lack of purchasing at the foot of the resale market. First-time buyers traditionally fulfil this function, and in doing so start chains which allow those at the bottom of the housing ladder to trade up."

He continued: "The channelling of first-time buyers into new-build properties loses this benefit to the market. Opening up similar initiatives to include resale properties would be a real boost for the wider housing market and encourage first-time buyers to get involved by allowing them greater choice."