West Kent estate agent Simon Miller of Simon Miller and Company asks what next for the property market

For us at Simon Miller & Company the Help to Buy announcement came out of the blue. We were actuallyanticipating a rethink from the government on Help to Buy – because all the economic indicators point to rapid house price rises – for us, it’s clear the housing market could overheat when we look at the activity here in Maidstone and the Weald.

We’re seeing so much activity, in terms of property coming on to the market, and the speed at which we are selling it, that we don’t believe the scheme is actually required.
Perhaps the government has brought the scheme forward to gauge the early reaction and effect. Maybe, the lobby to reconsider the scheme has convinced them to trial the arrangement early to withdraw it well before the next Budget?

In any case, there appears to be no absence of buyers in our local area already. Our properties are selling almost faster than we can get them listed and we won’t be the only estate agent experiencing this.

As a consequence, some new instructions are coming to the market at inflated prices. Some agents are exploiting the climate to win business by over valuing and offering significantly reduced fees. There is nothing new in this reaction.

After all, market forces determine the conditions within which we work and our fees and approach must change accordingly. However, there’s a responsibility on us all to ensure we are facilitating property transactions that strengthen the longer term local economy.

Higher value properties are largely unaffected. Anything valued above £600,000 does not benefit directly from the scheme. One revision to the criteria for the Help to Buy scheme we would like to see considered would be that only first-time buyers should benefit. In turn, everyone else in the property ladder would still see the advantage, without a house price bubble being blown and inevitably bursting!

With estate agents across the country reporting a “frenzy of activity” since the second phase of Help to Buy was announced, many offices are being overwhelmed with buyer inquiries. We’ve had the best first week of October for many years. We believe lenders will need to put a cap on the amount they lend under the scheme at some point soon in an effort to slow down demand.

What we hope is this new confidence encourages property owners to put their property on the market now. This means supply will keep up with demand and we stand a chance of keeping property prices from rising out of control.

The second phase of Help to Buy is far simpler for both buyers and conveyancers, requiring little additional work – unlike the first phase of the scheme.

There is a mortgage indemnity put in place and repayments are easier to understand and there is no reason a property bought with a Help to Buy indemnity mortgage should take any longer to complete on than a home bought with a standard mortgage.

Visit the Simon Miller property blog at www.simonmillerpropertyblog.co.uk for more tips and advice.