January 1st 2014 the latest stage of help to buy starts. A government guarantee to provide up to a 20% deposit to anyone with a 5% deposit who is looking to buy their sole residency, whether new or old build.
I think the consensus is that the HTB scheme will not only support house prices in 2014 but will inevitably lead to house price increases in 2014.
Clearly the anticipation of the 2014 HTB is currently influencing the behaviour of buyers and sellers in the 2013 scottish property market.
Here's my theory:
First time buyers who can afford a mortgage will buy in 2013 and will not put it off until 2014 as they expect first time buyer prices to increase in 2014. However this first time buyer market in 2013 will still be at historically low levels.
For the remainder of 2013 I think you will see an increase in second steppers putting their houses up for sale. Indeed anyone moving up the property ladder may be best advised to sell in 2013 and thus be able to buy in 2013 their upsized property.
Why would someone upsizing their property wait to act in 2014 when house prices will be higher and they will be relatively worse off. For example they sell a house in 2014 for say 130000 which has an annual increase of 5 % and buy a house for 250000 which has also increased 5% annually.
Of course their should be an increase in cash buyers in 2013, particularly buy to letters, if the expectation is for rising prices in 2014. This should help to support the mid and upper rung of the property market in 2013
However towards the bottom of the property market my view is that the HTB will see buyer numbers increase a little in later 2013 but any increase in buyers will be more than offset by an increase in sellers. I expect a dip in house prices over next 4 months in the first time buyer and second stepper market.
