Swindon’s rising property prices bad news for first-time buyers

By Anita Jaynes on July 5, 2016

The government’s new Help to Buy scheme is designed to help first-time buyers across the country get on the property ladder. But with rising house prices, not only in Swindon but across the UK, how much help is really available for those buying their first home?

How does the Help to Buy scheme work?

The new scheme pays a bonus of up to £3,000 on savings that can be used towards buying a property. Those entering into the scheme can save up to £2,400 a year (and an extra £1,200 in year one). When you’re ready to buy your first home, the government pays a 25% bonus, up to a maximum of £3,000. There’s a price cap that applies though, and you’ll only qualify for the bonus if you’re buying a property up to £450,000 in London or £250,000 in the rest of England.

Property price hikes

According to property experts Property Rescue, the average cost of two-bedroom houses across the country are far too expensive for people to apply for the bonus. House prices are too high in 67% of areas in the South-East, 65% of areas in London and 53% of areas in the East of England. In contrast, less than 5% of homes in areas in the Midlands, Yorkshire, the North-East and Lincolnshire exceeded the cap.

How do other countries help first-time buyers?

Of course, you could always move to Oz where some states give first-time buyers a grant of up to $10,000 (£5,091). But at least here in the UK things aren’t as difficult as in China, where a deposit of 25% is required to get on the property ladder – often dropped to 20% in larger cities such as Beijing.

Rising Swindon property prices

Experts are predicting a boom in property prices in Swindon over the next 5 years, which could see house prices rise by as much as 40% by 2019 (that’s compared to the national average price rise of 30%). This is great news for sellers, but not so great for anybody planning to open or already saving with a Help to Buy ISA. Swindon’s excellent transport links to London and low housing prices are ensuring the area grows in popularity – you can be in London in less than an hour – and prices are rising as a result. But there’s yet more bad news for those trying to get on the property ladder in Swindon – according to a survey carried out by Adzuna in 2012, wages here are also the lowest in the country.

Not all doom and gloom

The good news is that Swindon Borough Council has taken steps to address the empty homes issue that’s been plaguing the area since 2012. The number of empty homes in Swindon had fallen from 559 in2012 to 407 by September 2015. This is thanks to the council collaborating with local property owners, in a bid to provide local families with new homes. Empty properties can fall into disrepair, attracting vandals and pests and lowering the value of other houses in the neighbourhood.

The Help to Buy ISA may be helpful for those living in areas where property prices are lower, but with prices rising across the country – and in Swindon in particular – it will only be a few first-time buyers who are lucky enough to benefit from the 25% bonus payable by the government.