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Over the last decade research indicates that across the UK as a whole, house prices increased at an average rate of 4.3% each year. Such performance has outstripped the performance of shares on the FTSE 100 which effectively doubled in value over the last ten years. Little wonder then that first time buyers have found joining the property ladder a challenge, writes Chris Macartney, a Partner in our Landlord & Tenant team.

So it’s quite a surprise to read from the usually sure footed former presenter of Location, Location, Location, Kirstie Allsopp “that many young people could afford to buy a home if they made more sacrifices.”

As my colleague David Hodgson recently wrote here the Bank of Mum and Dad are increasingly supporting their children with gifts, loans, re-mortgages to help their children invest in their own home. As he wrote then those in the fortunate position to help will often do so but tend to pay little attention as to how their financial assistance is protected. In my experience in happy times people pay little regard to issues that only come to light when things go wrong.

Whilst nobody wishes to think negatively or plan for the worst, with a bit of thought and careful planning, disasters can be avoided. People do not think twice about taking out a policy of insurance to cover financial loss and this is no different.

The government has always recognised that first time buyers find joining the property ladder expensive. Help to Buy which was first introduced in 2013 enabling those who perhaps did not have the means to mortgage a property outright to get on to the housing ladder.

Many of those first time buyers are now ready to move on, and buy another property, or to stay put and switch their mortgage agreement or buy a larger proportion of their property, known as staircasing.

Whether you’re a buyer or a seller our advice is that you should always use a chartered surveyor recognised by the government’s Help to Buy scheme to value your property for mortgage purchases.

Deposit Unlock is a new scheme set to replace Help To Buy

The Home Builders Federation (HBF) and 17 of its largest members have developed a new mortgage indemnity scheme called Deposit Unlock. Upon completion of home purchases offered as part of the scheme the developer funds a mortgage indemnity and deposits cash to cover any potential losses. The scheme greatly reduces risk for the lender, protecting them from a proportion of the potential loss in the event of any default.

Nationwide and other building societies will offer the product on new builds for both first-time buyers and second steppers up to £750,000, according to Estate Agent Today.

Supporters say Deposit Unlock will help open up the new build market to more borrowers who do not have access to large deposits or the ‘bank of Mum and Dad’, and replace Help To Buy programme which will end in 2023.

Reported here Stewart Baseley, Executive Chairman of the HBF, says: “Ensuring people can buy a new build home is key to the industry’s ability to deliver the government’s housing ambitions. Too many people are unable to realise their ambition of homeownership because they simply can’t afford the deposit required.

“The industry has worked hard to develop a sustainable solution that will help more prospective buyers onto the housing ladder, maintain demand and so enable builders deliver more desperately needed homes.” 

Bishop & Sewell’s lawyers have the knowledge and experience to guide you through these challenging times and have rankings in the Legal 500 for their expertise.

If you are affected by similar issues or would like to have a related discussion in confidence, please call me quoting reference CB277 on 020 7091 2869 or email: cmacartney@bishopandsewell.co.uk

The above is accurate as at 07 February 2022. The information above may be subject to change during these ever-changing times. The content of this note should not be considered legal advice and each matter should be considered on a case-by-case basis.


Category: Blog, News | Date: 7th Feb 2022


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