Open Market HomeBuy may not be best option

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Open Market HomeBuy may not be best option

Thu 5th Oct 2006

A government institutive aimed at giving first-time buyers a helping hand on the property ladder might not be offering customers better value for money than a traditional mortgage.

The Open Market HomeBuy scheme is aimed at providing an opportunity for people who would not be able to enter the property market without help, such as first-time buyers, key workers and social tenants.

The contentious aspect of the scheme is the fact that the government and lender's share of the property is linked to its valuation and not its selling price which in certain cases where less than the asking price is received, the home owner would get less than expected.

Melanie Bien of SPF Sherwins stated: '"This scheme is only really suitable for those who can't get on the housing ladder any other way."

Under the Open Market HomeBuy scheme both the government and mortgage lender put up 12.5 per cent each of the property price with the borrower paying for the other 75 per cent.

Under the rules of the Open Market HomeBuy plan, four high street lenders will match the government's share of the property price. They are Nationwide, Yorkshire Building Society, Advantage and Bank of Scotland.

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