22 September 2009
Loan scheme 'will help artificially prop up house prices'
A loan scheme designed to help mortgage seekers access additional finance for stamp duty costs and legal fees will be of little help to first-time buyers (FTBs), it has been suggested.
The initiative has been set up by Dragon's Den entrepreneur James Caan and Look4Aproperty.com and it allows people purchasing a property through the website to access up to £50,000 in an interest-free loan.
Responding to the development, Katy John, spokesperson for PricedOut.org.uk, said that, while it is necessary for homebuyers to be able to borrow sufficient money, measures such as this scheme help to prop up the cost of houses.
The expert remarked: "Whilst it is important that people - particularly FTBs wishing to buy their first home - are able to borrow enough to buy what is within their means, artificial measures to prop the market itself up are not at all helpful for FTBs."
More needs to be done to address the "underlying issues", such as the building of more homes, she added.