New fig­ures show gov­ern­ment backed hous­ing schemes have cre­at­ed 25,000 new home­own­ers to date.

The first thing to note is that Gov­ern­ment backed hous­ing schemes are noth­ing new. Gov­ern­ment backed schemes date back to the 80’s when Thatch­er intro­duced the Right to Buy’ scheme, and more recent­ly, Help to Buy (HTB) which has devel­oped from pre­de­ces­sor schemes Home Buy Direct’ & First Buy’. The main thing to note is the cur­rent HTB scheme is applic­a­ble to new build prop­er­ties only.

Clients and oth­er stake­hold­ers often get lost in the sea of Con­veyanc­ing when it comes to these schemes. We act for clients across the prop­er­ty spec­trum from Shared Equi­ty or Shared Own­er­ship prop­er­ties, to res­i­den­tial and com­mer­cial acqui­si­tions cost­ing millions.

Much of the work is sim­i­lar. We check the legal title and advise clients on covenants and rel­e­vant Lease terms, which will have a bear­ing on their short term inter­ests, such as occu­py­ing the prop­er­ty; through to their long term inter­est in resale and long term val­ues. We also secure finance charges and also ensure oth­er cru­cial out­comes such as vacant pos­ses­sion. All of these are rel­e­vant to the HTB Scheme.

Right­ly or wrong­ly, the Gov­ern­ment designed the HTB scheme as even more process dri­ven than the Con­veyanc­ing process. It must be not­ed, that the cur­rent guise is slight­ly sim­pler than its pre­de­ces­sors, with an equi­ty charge of 20% com­ing from one source, rather than the 10% con­tri­bu­tions from the HTB agency & rel­e­vant devel­op­er respec­tive­ly. The HTB scheme adds two fur­ther key mile­stones to the Con­veyanc­ing process. You need an Author­i­ty to Pro­ceed’ (ATP) from the HTB agency which allows the devel­op­ers Solic­i­tor to for­ward con­tract papers. You then need your mort­gage offer and val­u­a­tion report in place to enable your Solic­i­tor to for­ward the rel­e­vant forms to request the Author­i­ty to Exchange’ (ATE).

Hav­ing dealt with these cas­es first hand, they become quite enjoy­able in the same way as iron­ing. A lit­tle too tax­ing but the rep­e­ti­tion is sat­is­fy­ing in an unnerv­ing way.

Whether the sec­ond phase of the HTB Scheme is a suc­cess, which sees it extend­ed into the gen­er­al prop­er­ty mar­ket, is very much a wait­ing game. There have been many con­cerns voiced about peo­ple abus­ing the scheme for sec­ond homes, some­thing the Chan­cel­lor has been quick to dampen.

Fur­ther con­cerns have been voiced about its effect on house prices which have been wide­ly report­ed to have risen aggres­sive­ly in recent months, with fears of over­heat­ing. The for­mer gov­er­nor of the Bank of Eng­land, Sir Mervyn King, said the scheme should not be extend­ed to the wider market.

One ques­tion I always pose is why the scheme is extend­ed to pur­chase prices of up to £600k. That’s well over dou­ble the UK aver­age prop­er­ty price, & sig­nif­i­cant­ly more than required adjust­ments for the Lon­don mar­ket. I ques­tion whether the scheme will have a detri­men­tal effect on the speed of the sales in the wider mar­ket. The new build mar­ket is very spe­cial­ist, which is why we have a spe­cial­ist new build divi­sion. Devel­op­ers also have spe­cial­ist Solic­i­tors act­ing for them, mean­ing the process is gen­er­al­ly effi­cient. As with all Con­veyanc­ing, you only need one par­ty involved to delay the chain. My con­cern is the adap­ta­tion of the entire legal mar­ket to the scheme and whether the scheme will affect a mar­ket which our econ­o­my relies on so heav­i­ly. One thing is cer­tain; nothing.

For fur­ther guid­ance on the Help to Buy Con­veyanc­ing process or oth­er prop­er­ty relat­ed mat­ters, please con­tact Rick Bar­row on 01625 523 988 or email mail@​JBGass.​com