First-time buyers are paying an 8% premium on Help to Buy properties compared with other new-builds.
Analysis by removals and conveyancing comparison website reallymoving.com – based on 70,000 first-time buyers using its service between October 2017 and July 2018 – found those purchasing a new-build home without using the Help to Buy equity loan scheme pay on average £257,908 compared with £277,968 paid by those who use the scheme.
This is on top of the average 16% new-build premium compared with secondhand properties.
Reallymoving.com is warning that the Help to Buy scheme could become “the next PPI scandal” as home owners may face difficulty when selling their property on, especially at a time when prices are falling in London and the south-east.
Those hoping to sell may also find that as they are required to repay the equity loan portion in full, making them unable to also raise a deposit on their next property and leaving them trapped, warned Rob Houghton, chief executive of reallymoving.com.
He said: “The Help to Buy scheme has provided a leg up on to the housing ladder for many first-time buyers but this data suggests that first-time buyers may not be getting such a good deal after all.
“When they come to sell this could increase the risk that their home isn’t worth what they paid for it.”