First-time buyer economy boost

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THE government is hoping to give a boost of up to £1m to help the island’s ailing housing market by stimulating first-time buyers.

Social Care Minister Martyn Quayle MHK said his department was proposing a number of measures, including raising the earnings cut-off level for support from £25,000 to £35,000 and increasing the minimum amount available from £3,000 to £5,000.

For buyers wanting to move on and transfer their grant, the maximum purchase price goes up from £220,000 to £250,000.

Mr Quayle said since the scheme first started in 2000, 1,200 first-time buyers had received help.

He said: ‘My department’s house purchase assistance scheme has proved to be a very effective way of helping individuals and families to buy their first home, something many could not have achieved without our help.

‘This will stimulate the housing market, helping others to move further up the housing chain, which, in turn, will stimulate spending in the local economy and so help to protect jobs,’ he added. Mr Quayle said he estimated the move would generate up to 150 extra house moves next year, in turn generating £2m worth of economic activity.

Concerns over the slowing housing market were one of the factors behind the decision, Mr Quayle said. ‘The housing market is not only a vital source of economic activity directly, it is also linked to consumer confidence,’ he added.

The volume of sales of flats and houses has fallen by more than a half in the past three years.

In the year ending in March 2008, there were 1,962 transactions compared to 890 during the year ending in March 2011.

First-time buyers face difficulties finding deposits and this impacts on others who are unable to sell and move further up the property ladder, Mr Quayle said.

Approval for the measure is to be sought at this month’s Tynwald sitting and, if granted, the measures would run for the duration of the current assistance scheme, which ends in July 2012.

First-time buyers under the current scheme can receive financial assistance from the government to buy eligible properties priced up to £150,000.

The grants are assessed on a sliding scale with those earning up to around £19,500 attracting the maximum.

Mr Quayle said: ‘I believe this proposal builds upon that success and can also make an important economic contribution at a crucial time. I hope to secure Tynwald’s support at its July sitting.’

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