Property subsidy scheme for first-time buyers shows little promise

Property subsidy scheme for first-time buyers shows little promise


When President Jacob Zuma announced that the Department of Human Settlement would be instituting a finance-linked individual subsidy programme for first time home buyers, there was a sudden influx of hopeful potential home buyers keen to make use of this programme.

This was said recently by Daphney Klopper, the Rawson Property Group's franchisee for Table View and a co-franchisee for Parklands.

"The Finance-Linked Individual Subsidy Programme (FLISP) scheme," said Klopper, "looked exceptionally promising when it was announced because it offers subsidies up to R87,000 towards the purchase of a home by a first time buyer. However, clients who approached us and their banks or bond originators for a mortgage loan making use of this scheme have not as yet seen any concrete response to their applications."

The banks, said Klopper, appeared to be equally keen to implement the scheme but when approached were almost always told that the Department of Housing was still establishing the procedures which had to be adhered to and was not yet in a position to make these subsidies.

This was confirmed by the Western Cape Minister of Housing, Bonginkosi Madikizela, in an interview on Radio 567 Cape Talk. But, said Klopper, he apparently later told Mike van Alphen, the National Manager of Rawson Finance, that the department thought it essential to "educate" first time buyers before embarking on the FLISP scheme.

More recently, said Klopper, it was suddenly learned via the government's website information service that the full sum set aside for these subsidies had been entirely allocated as part of the state's R17,9 billion poverty relief subsidies. Exactly to whom the grants had been made was not spelt out, but the net result, she said, was that her franchise's potential home buyers had clearly been left out in the cold.

It is believed, she added, that a large portion of this very welcome subsidy fund has been given to tender developments handling the Department of Human Settlements' projects or possibly directly to banks prepared to deal with first time home buyers, however, none of which have benefitted directly from the subsidy so far. These subsidies would be a great help in developing areas such as Parklands, where many first time home buyers need assistance.

"Recently," said Klopper, "Absa officially launched their first FLISP-linked mortgages. Now the real estate industry would like to know how much of the original fund has been allocated and how much is still available."

Rawson Property Group Press Release

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Denny Crane

Denny Crane
It's not me ... yet. Denny Crane from the TV series Boston Legal. Click on picture if you're not sure who he is!