This story on the BBC news site says Conwy Council is planning to run a scheme to ‘help first time buyers’.
I don’t think it does help first time buyers at all. It helps people selling houses.
Mr Hughes said the council will be taking steps to keep the risk to a minimum and the maximum value of the property to qualify would be £140,000.
If the buyer defaulted on the mortgage, the council would have to pay back the part of the loan it had guaranteed.
This means the scheme needs to have ultra good vetting on mortgage applicants. And if you can afford to buy a house then do you really need the council’s help?
The council will also need to be open and honest about who buys houses with this scheme so it can be clean of any favouritism.
Of course if this scheme is propping up house prices then it is not helping first time buyers at all.
If no one is buying houses then prices will have to come down. As soon as they have come down enough people will be able to save up their own deposits. Lower prices would also mean mortgage affordability was better, less risk of defaults and less debt! With less money being spent on housing costs it’s easy to see that people will have more money for other things.