First-time buyers: Darling builds up HomeBuy property funds

First-time buyers: Darling builds up HomeBuy property funds

Homebuyers were thrown a few scraps by the chancellor, with an extension to the stamp duty holiday and some extra cash for a scheme to help people get on the property ladder. But most commentators said there wasn't enough in Alistair Darling's red box for first-time buyers and others trying to negotiate the property market.

One glimmer of good news was the extra £80m being pumped into one of the government's HomeBuy schemes aimed at those looking to buy their first place. This was welcomed by Gregory Murch, who was recently helped into home ownership by one such scheme.

Murch bought his two-bedroom mid-terrace home in East Grinstead, West Sussex, with the help of the New Build HomeBuy shared ownership scheme, and moved in about a month ago. He financed the purchase with a five-year fixed-rate mortgage from HSBC. Murch, who works in technical support for a satnav company, says the extra government cash is good news for first-time buyers.

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"Some of the schemes they have set up are a good idea. But getting information about all the different schemes available for first-time buyers was quite difficult," he says. "I heard about this scheme and tried to look for information. It's not written in as clear English as it could be."

Last September, ministers said up to 10,000 first-time buyers were set to benefit from another shared ownership scheme, the £300m HomeBuy Direct initiative, which lets people take out a mortgage for 70% of the cost of the property they are buying. In December, the government beefed it up with a further £100m and this week the chancellor shovelled in £80m more.

The remaining 30% of the purchase price is funded via an equity loan that is free of charge for five years, with the money for this coming from the government and the property developer.

Critics have pointed to the fact that HomeBuy Direct only applies to newly built properties in specific developments, and that only those with a household income of less than £60,000 are eligible. But the government claims more than 100 developers are taking part. Last month, housing minister Margaret Beckett met one of the first people in the country to benefit from HomeBuy Direct, a 25-year-old policewoman who is buying a two-bedroom Barratt Homes flat in Cheltenham for £99,000 which would have cost £142,000 without the scheme.

Anyone interested in applying should contact their regional HomeBuy "agent". The chancellor said in his budget speech that the scheme had attracted interest from 32,000 people since September. However, the financial boost has been criticised as having been channelled in the wrong direction.

Richard Stone, director of affordable housing broker SPF Sherwins, says: "This [£80m] only supports housebuilders and those who want to buy new-build. Why didn't it go to MyChoiceHomeBuy, where demand is outstripping supply?"

MyChoiceHomeBuy is another government-funded home ownership scheme, but one which allows first-time buyers to buy any property they like on the open market. Borrowers are allowed to choose pretty much any mortgage lender they like, and can apply for a loan of up to 50% of the property's value. This has seen the highest take-up of any of the available shared ownership schemes – so much so that it is no longer available in some areas.

There had been calls for the government to take dramatic action on stamp duty. Some experts said it should perhaps even be suspended for a while. But in the end, Darling said the stamp duty holiday on properties costing up to £175,000 was merely being extended for four months, until 31 December.

The threshold at which the tax kicks in was initially increased from £125,000 to £175,000 for one year from last September.

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