An estate agent based in London warns that the Help 2 Buy scheme could force down rents by up to 5%  in most areas of London. They fear that many people who have been long term renting will take the plunge into home ownership.

They reason that if tenants become home owners and upset the market price many landlords may decide to slash their rents to become more competitive to make sure that they attract the right tenants.

Whereas the reverse is expected in the sales market as more and more people will be encouraged to enter the property ladder which will push property prices upwards. The places most likely to be affected will be the catchment areas for the younger and relatively affluent buyers which include Battersea, Docklands, Fulham and Islington. 

 

Richard Davies, residential operations director of the estate agent, said: “More landlords may find their tenants giving notice as they move away from the private rented sector and into home ownership.

"This could seriously impact the number of rental properties coming to the market for re-letting which could in turn see rental levels fall.

“While I am confident that Help to Buy will be of great benefit to a large number of first-time buyers, I am concerned that many people are not fully aware of the details of the scheme and how it works.

"Before applying I recommend buyers seek independent expert advice to make sure they understand the terms and conditions of everything that is involved.”