FTB schemes are not ideal for everyone

First-time buyers have been hit more than most when it comes to trying to purchase properties for sale since recession first came to the shores of the UK in 2007. Thanks to the fact that there have been job losses and uncertainty regarding finances across the country since then, many banks have tightened the restrictions on what they are prepared to offer those buying their first home.

This can lead to some banks and building societies asking for far more than the average buyer can afford to outlay in terms of a deposit for their mortgage, with many lenders even requesting more than 20 per cent of the value of the house in question.

Some schemes have previously been in place to try to enthuse first timers into still buying, like the stamp duty holiday, which bolstered the market ahead of its closure at the end of March of this year.

Since then, the government has brought in schemes such as NewBuy and FirstBuy, both of which can allow a new customer to purchase a brand-new build house with a deposit of as low as five per cent, with the government and housebuilder footing the rest of the cost of the initial outlay.

However, while the authorities would say that this has led to an increase in home ownership, one expert has said that it is important to look at both sides of the coin.

Mark Hayward, the chairman of the National Association of Estate Agents, said that while the schemes are positive, it is more for sentimental value from the government, as it does not cover enough people.

"It shows that the government is doing something to help first-time buyers. Unfortunately it is restricted to new homes only and it is restricted to those developers that have met the criteria that lenders put down. It doesn't suit everybody.

"The other issue is that lenders seem to still be attaching a premium in terms of interest rate to NewBuy mortgages, so they can cost more."

However, despite saying this, Mr Hayward did admit that the schemes had  helped some people get onto the property ladder where it may not have been possible for them to do so in the past.

He added that around 1,000 had taken advantage of FirstBuy to get their foot onto the property ladder for the primary time. This comes at a time however, when Mr Hayward admitted that first-time buyer enquiries are at an all-time low, making it difficult to judge the effectiveness of the projects from the government.

One criticism he did have though, is that the schemes are far too narrow, in that they only target first timers, which is an issue given that problems with moving up the ladder can be just as severe as getting onto it in the first place.

"[They could introduce] a similar scheme that they could back or safeguard that allowed the more exposed buyers to [purchase] second hand properties or properties that were under ten years old, so there is still some security in terms of structure and there aren't going to be any huge defects or huge renovation costs. Or they could put some mortgage guarantees in place," he concluded.