What has the ‘Help to Buy’ scheme done for Derby?

The Conservative’s and Liberal Democrats launched 'Help to Buy' last year to give a boost to the housing market.

The Help to Buy scheme involves the Government guaranteeing up to 15 per cent of a mortgage, acting as an indemnity for the banks and building societies who sign up (so far only three banks have done so). This means lenders can provide mortgages more confidently to borrowers with a 5 per cent deposit. It will apply to all types of properties, first-time buyers, home movers and re-mortgagers.

In the first 14 months (to end May 2014) there were 22,831 properties bought  with the support of the Help to Buy: equity loan scheme, up 2,283 (11%) from the total as at 30 April the majority of sales were to first-time buyers, representing 86% of total sales the average (mean) purchase price was £206,084.

Mr Cameron, during a recent visit to Ilkeston, said the Help to Buy scheme, introduced in April last year, has helped people in the East Midlands purchase 2,860 homes, 85% of whom were first-time buyers, and 27,861   nationally. Of the 2,860, some 168 were in Derby, though the Cabinet Office could not provide figures for how many of these were first-time buyers.

Quite interestingly, first timer buyers have had access to 95% mortgages since 2010 so I am not sure what it will do to the market, except highlight that property can be bought with a 5% deposit.

Scheme or no scheme, Derby continues to have a buoyant property market. Prices are rising, but not at the double digit level that was experienced in the early to mid 2000’s. If the scheme enables those who want to buy, to buy, then that can only be good for everyone in the town.
Over the last 2 or 3 years, it has mostly been landlords that have been buying property in Derby to let out. Carrying out a quick search on one of the price comparison websites, I was able to find in seconds that landlords can get fixed rate buy to let mortgages from as low as 2.99% until the end of 2016.

With rental yields in Derby of around 4% to 7% per year and the values increasing by 7.1% in Derby, and the overall yearly return is the region of 8% to 11% per year.

However, buying a buy to let property is full of pitfalls. If you have a good tenant, in a good property and a good relationship between tenant and agent, then not much can go wrong, as long as the relationship between the landlord and agent is exceptional. I pride myself on exceptional relationships with my  
landlords and their continued business speaks for itself.

If you are considering  becoming a new buy to let landlord, feel free to pop your head through the door of our agency on the St. James Street in Derby for some advice and opinion on what (or not) to buy.
It is true the property market is showing signs of good improvement, but, if you know where to look and what to look for, there are still bargains in Derby to be had.

If you would like to discuss anything further then please pop in and see me, send me an email or call me directly on 07977 235545.

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