Of those first time buyers who claim to understand phase two of Help to Buy some 23% wrongly think it is only for new build properties, according to new research from property firm Rightmove.
It also found that 22% don't realise it is available for homes up to the value of £600,000 and 34% think it is just an extension of phase one of Help to Buy, the equity loan scheme.
Some 29% of those who intend to buy in the next 12 months are first time buyers, the highest proportion Rightmove has recorded for over three years and heading towards the 40% norm associated with a healthy housing market.
The firm reckons that if the scheme was better understood it could help more first time buyers satisfy their housing needs, and the ensuing chain building momentum could help unlock the market, enabling more potential movers to trade up or downsize.
Currently on Rightmove, the UK's largest and busiest property website, 92% of all properties for sale are within the potential £600,000 threshold of Help to Buy phase two, and 90% of new builds. Traffic to Rightmove since the phase two announcement is up 30% compared to the same period last year.
The study among over 40,000 people reveals Help to Buy phase two has had an impact on people's decisions to move. Some 21% are either looking to buy because of the scheme or bringing forward their plans to buy, and 5% are looking to sell. A further 31% say they are waiting to see what happens before buying or selling.
Rightmove points out that communicating the full benefits of phase two of Help to Buy could help unleash this substantial wait and see proportion into action, helping to build chains from the bottom-up and helping to unlock pent up demand.
‘Although it's still too early to judge the impact of the scheme, we anticipate that more first time buyers getting onto the bottom rung of the housing ladder could have knock on effects further up, helping more people to trade up and downsize,’ said Miles Shipside, director and housing market analyst at Rightmove.
‘Many have postponed their move over the last few years as either limited equity or lack of confidence has left them unable or unwilling to. This scheme has the potential to offer hope and confidence to many of these home owners enabling them to come to market and free up some much needed supply,’ he explained.
‘But there's clearly a lot more that still needs to be done to make sure the maximum number of people who could benefit directly from the scheme or its knock on effects, can do so. A significant proportion of people say they are waiting to see what happens but if they better understood how the wider benefits of the scheme could help them trade up or downsize it might open up more supply and lead to a healthier and more sustainable housing market,’ he added.
Shipside also pointed out that the change to the Funding for Lending scheme, coupled with the tightened rules on lending as a result of the Mortgage Market review, means fears of a bubble have been quashed further.
‘To give first time buyers more of a chance to get on the property ladder, and help give potential movers higher up the chain the confidence to move again, the confusion needs to be addressed,’ he concluded.
