First-time buyers offered £70,000 deposits by local councils
First-time buyers are being offered deposits of up to £70,000 by their local council to help them on the property ladder, with taxpayers footing the bill if house prices fall.
Which actually looks like a sensible price for a youngster starting out with their first home.
Further reading: Sharp increase in homes for sale signals further house price falls
When push comes to shove, no market can defy the law of supply and demand for long – and that includes housing. So the sharp increase in homes being offered for sale – up 25pc last month, compared to a year ago – should come as no surprise.
The main reason that house prices have not fallen further since the credit crisis began nearly three years ago and still look expensive by historic standards is that unemployment and mortgage costs remain low. Most homeowners could afford to sit out the recession of 2008, 2009 and 2010.
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The extraordinary decision by Lloyds Banking Group, a taxpayer-supported bank, to fund local councils offering first time buyers £70,000 deposits looks like a last desperate attempt to rig the market. While that may be welcomed by the NAEA it is an offer first time buyers should shun. Rather than burdening themselves with debt now, they should wait for house prices to become more affordable.
The main reason that house prices have not fallen further since the credit crisis began nearly three years ago and still look expensive by historic standards is that unemployment and mortgage costs remain low. Most homeowners could afford to sit out the recession of 2008, 2009 and 2010.
...
The extraordinary decision by Lloyds Banking Group, a taxpayer-supported bank, to fund local councils offering first time buyers £70,000 deposits looks like a last desperate attempt to rig the market. While that may be welcomed by the NAEA it is an offer first time buyers should shun. Rather than burdening themselves with debt now, they should wait for house prices to become more affordable.
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