A government scheme aimed at helping Londoners onto the housing ladder has already already been flooded with thousands of requests since its launch last week.
Housing minister Brandon Lewis said London Help to Buy – an extension of the equity loan scheme that has been available to buyers around the country since April 2013 – has had over 15,000 expressions of interest since it went live on 1 February.
The scheme, announced in the chancellor in November’s Autumn Statement, offers Londoners with a five per cent deposit access to an interest-free loan worth up to 40 per cent of the value of a newly built home costing up to £600,000.
Buyers then only need to get a mortgage of up to 55 per cent to cover the rest. However critics of the scheme say will only encourage more people into home ownership who would otherwise not be able afford it.
JLL's head of residential research Adam Challis warned that London Help to Buy will disproportionately support middle-class first-time buyers, while leaving many below the level of income required to qualify for a mortgage – even with the equity support – to go unsupported.
"I am concerned that Government's narrow focus on first-time buyer support overlooks the hundreds of thousands that join the private rented sector each year, or the millions on housing waiting lists. Help to Buy only addresses a very narrow band of genuine housing need and represents a distraction from the bigger housing supply crisis in this country," he told City A.M.
Housing expert Henry Pryor said helping people to afford homes that would otherwise be out of their reach may seem politically sensible but was also "immoral":
"Most people taking up the governments offer have no first hand experience of negative equity. You need to be over 35 to have lived through a property recession in the capital. They are scary things and although you will be sharing the pain with government the State will want it’s money back before you get yours," he told City A.M.