Did agents send wrong message to Chancellor?

A call to the Government by a leading body of estate agents to give fiscal incentives to first-time buyers is "completely detached from reality", claims housing market commentator Henry Pryor.

He was responding to the National Association of Estate Agents' (NAEA) call to Chancellor George Osborne to ensure that lending criteria for homebuyers is sensible, to review stamp duty and to explore the introduction of fiscal incentives to attract more first-time buyers.

Pryor said: "They must be crackers! The NAEA is blind to self-certified mortgages, deaf to the sub-prime crisis and too dumb to work out what happens if you offer to make home buying easier.

"The NAEA wants to stoke the bottom of the housing market in a foolish attempt to get sales volumes going again.

"What they fail to grasp is that if you give first-time buyers a tenner, all they will do is spend it. Give a drunk another drink, they'll drink it!"

As the Governor of the Bank of England said in his Mansion House speech: "The time has come to take away the punch bowl."

Pryor adds: "Anyone over 35 knows that cleaning up the mess after a housing party is no fun.

"The last recession was painful and left many scars. Calls to make borrowing easier with incentives to first-time buyers who have already had the cost of stamp duty removed is just bonkers.

"Most property people accept the part their sector played in the crisis and many accept the new, more modest market that now exists and have no desire to pump it up again.

"Most of us want the last few drunks keen to continue to party to just go home."

In fact, the chancellor indicated in the Budget speech that the stamp duty exemption for first-time buyers will be reviewed - suggesting the NAEA message landed on stony ground.

Jonathan Moore, director of property website www.easyroommate.co.uk, says: "Removing the stamp duty break for first-time buyers would be a shame - but it doesn't make much difference to first-time buyer finances anyway.

"Getting a mortgage is the key hurdle for first-time buyers to clear. Lenders still expect buyers to stump up huge sums in deposits of 25 per cent.

"Without backing from the Bank of mum and dad, this is impossible for thousands of first-timers."

Mr Moore suggests one solution to current problems could be Flatmate Mortgages - enabling would-be buyers to incorporate flatmate income to get larger advances from lenders.

Mr Moore thinks Flatmate Mortgages could enable the average first-timer to access an additional £11,000 for their mortgage.

But Mr Pryor isn't too impressed by that suggestion either.

"By giving people extra money to spend through various incentives, it means more money is given to the sellers and prices continue to be pushed upwards, making it even harder for future generations coming through.