Posts with tag: Help to Buy

Help to Buy scheme a success

Published On: June 22, 2015 at 2:47 pm

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Encouraging statistics are set to be released that indicate the Government’s Help to Buy scheme is proving to be a success.

Housing Minister Brandon Lewis is to reveal that since the inception of the scheme in April 2013, 131 new homeowners per day have been created.

Homes

The launch of the Help to Buy scheme has already helped over 100,000 people secure deposits for a home. In addition, soon to be released figures reveal that 80% of these were first-time buyers and 94% of sales made as a result of the scheme were outside of London.[1]

Mr Lewis believes, ‘the figures clearly show the continuing success of the Help to Buy scheme in supporting many credit worthy, hardworking people who want to buy their own home.’ He stated that the Tories’, ‘long-term economic plan has turned this country around from the one we inherited,’ and that, ‘numbers of first-time buyers are at their highest since 2007.’ He also said that, ‘house building continues to climb and over 225,000 households have been helped to buy or reserve property since 2010 through Government backed schemes.’[1]

Help to Buy scheme a success

Help to Buy scheme a success

Extended

As a result of the schemes’ success, it is to be extended until at least 2020. Stewart Beasley, chairman of the Home Builders Foundation, feels that this is a huge boost for potential homeowners. Beasley feels, ‘that demand is being met by the house building industry which is increasing output at the highest rate for decades.’[1]

‘With this support for buyers in place, house builders are planning greater investment in land, labour and supply chains to maintain and sustain this increased level of activity,’ Beasley continued. ‘Delivering more, high quality houses will provide the next generation with decent homes, create jobs and boost local economies across the country,’ he added.[1]

Data shows that the average price of homes purchased under the scheme is £213,954, down substantially on the UK average of £271,000. The main cities benefiting from the scheme were found to be Leeds, Birmingham and Wiltshire with, 1,477, 1,301 and 1,242 sales respectively.[1]

[1] http://www.propertywire.com/news/europe/uk-help-buy-success-2015061810651.html

 

 

Help to Buy slows for fifth straight month

Published On: June 8, 2015 at 9:52 am

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Categories: Landlord News

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New data released from the Mortgage Advice Bureau has given reason for concern over the Government’s Help to Buy scheme.

According to the figures, the Help to Buy equity loan scheme for new homes has experienced five straight months of completions declining on a year-on-year basis.

Slide

The data shows that there were 4,628 Help to Buy completions in the first quarter of 2015, which indicated the slowest quarter since the third period of 2013, which was the first full quarter of the scheme. On a year-on-year basis, completions fell by 17%.

However, more of a concern is the fact that completions in quarter one of this year fell by a substantial 43% in comparison with the final quarter of 2014.[1]

Private rise

Despite this concerning slide, statistics show that private enterprise completions are actually rising. During quarter one of 2015, there were 25,970 private enterprise housing completions, representing a 14% increase from the same period last year, when 22,710 projects were completed. This also represented an increase of 7% from quarter four of 2014.[1]

Equity loan completions for the first quarter of 2015 accounted for 18% of the total of private enterprise completions. This was down by 7% on the same period last year.[1] This highlights the drop of in the role of Help to Buy in the private housebuilding sector.

Reaching target audience?

In the face of this fall in activity, data from the Mortgage Advice Bureau also shows that the scheme does continue to find its target audience. The National Mortgage Index found that that the average Help to Buy customer in quarter one of this year was 31.9 years old. This was 5.5 years younger than the average homebuyer across the market as a whole.[1]

It was also found that the average Help to Buy customer earns 11.5% less income than the market average. Their average salary was found to be £33,441, in comparison to the market average of £37,767.[1]

Help to Buy slows for fifth straight month

Help to Buy slows for fifth straight month

Success?

Andy Frankish, new homes director at the Mortgage Advice Bureau, feels that, ‘the Help to Buy equity loan has been a great success for helping first-time buyers and those with lower incomes get onto the housing ladder.’ He suggests that, ‘the drop in completions over the last few months at a time when total house building is on the up suggests lenders are putting their weight behind new builds without needing the Government incentive.’[1]

‘It is certainly positive for the economy that house builders no longer look quite so dependent on Help to Buy to grow the housing stock,’ continued Frankish., more asking, ‘would house building rise faster if more can be done through Help to Buy?’[1]

Frankish believes that, ‘if the scheme was being used to its full capability with better promotion of the scheme on a national level; it would not only help those still struggling to access the housing market but provide a much needed push for house building which is still a great concern and a long way off target.’[1]

[1] http://www.propertyreporter.co.uk/finance/htb1-grinds-to-five-month-slowdown.html

 

 

Property Industry Welcomes Housing Bill

Published On: June 1, 2015 at 8:27 am

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Categories: Landlord News

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The UK is set for an increase in supply of new starter homes for young first time buyers, revealed the Queen’s Speech last week.

A number of property issues were mentioned in the opening of the new Parliament on Wednesday, which have received a positive reaction from property experts.

First time buyers under 40-years-old will be offered new starter homes at a 20% discount of their open market value. The Right to Buy scheme will also be extended to 1.3m housing association tenants.

Property Industry Welcomes Housing Bill

Property Industry Welcomes Housing Bill

The Government is also going ahead with the Right to Build scheme, which requires local planning authorities to support self builders registered in their area in finding suitable plots to build or commission their own homes.

A statutory register of brownfield land will also be introduced, in a bid to achieve the aim of getting Local Development Orders in place on 90% of all appropriate brownfield plots by 2020.

Furthermore, the neighbourhood planning system will be simplified and sped up to help communities meet local housing and development needs.

The property and housing industries have reacted positively and they agree that hundreds of thousands more homes needs to be built, especially in London.

But Director of Your Move and Reeds Rains estate agents, Adrian Gill, wonders whether these new schemes are enough: “Building a home in Britain is about 18% more expensive than in Ireland, for example. Preliminaries like planning fees account for 12% of the total costs in the UK, compared to 10% in Ireland. Reforming the red tape surrounding the house building process may be one of the only safeguards around steadier house price rises.”

He adds: “Homeownership is still a key life milestone and aspiration for UK households, so any measures that bring this goal closer into view will be very welcome. The Right to Buy extension sounds good on paper, but we’ve yet to see how this will translate in practise, and the reality is that authorities will have to sell off existing stock first before they can fund and deliver this new promised land of affordable properties.

“At the same time, tenant demand for housing will be accumulating, and this could spill over into the private rented sector and artificially push up prices and competition for rental homes.”1 

Chairman of the Intermediary Mortgage Lenders Association (IMLA), Charles Haresnape, believes the Government should work quickly with the mortgage industry to ensure finance is available for consumers: “If not, we will be left with more schemes that are implemented in a hurry with lenders and brokers having to play catch-up.”

He is also unsure about the Help to Buy mortgage guarantee scheme, which could hold no certainty for the future: “Reviving Help to Buy certainly promises another short term boost to homeownership, but there must be a more joined up approach to increasing the long-term housing supply rather than focusing on short-term demand.”1

1 http://www.propertywire.com/news/europe/uk-housing-bill-launch-2015052710557.html

Professionals Think the Housing Market is Being Held Back

Published On: May 20, 2015 at 12:00 pm

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Most property professionals in the UK think that the residential housing market is being held back, naming lack of supply as the main reason, found a survey from conveyancing services firm myhomemove.

A huge 90% of respondents believe the market is being supressed, with 47% saying the shortage of homes for sale is the biggest cause.

This indicates that improved confidence from vendors following the general election result could increase stability and predictability that will drive the amount of house sales up.

Professionals Think the Housing Market is Being Held Back

Professionals Think the Housing Market is Being Held Back

The research reveals that 24% of experts blame a lack of mortgage availability, possibly due to the stricter lending rules on older borrowers. 16% think that a shortage a new build homes is restricting the market, highlighting the need for developers to build more.

Professionals are supporting an extension of the Help to Buy scheme for new build properties to 2020. A high 80% of those surveyed back the system, compared with just 8% who do not.

Additionally, 65% support the Conservative Party’s starter homes scheme, outlined in its manifesto, with only 3% opposing it.

However, the experts were divided on another main housing policy, the issue of reducing inheritance tax on family homes. 42% support this and 38% are opposed.

Furthermore, 38% think that the target of building 200,000 new homes is achievable. The new Government pledged to build this number for first time buyers.

The professionals believe the Conservatives will find it easy to apply its right to buy scheme for housing association tenants. 43% think this is realistic and 27% are not sure.

There was a higher proportion of professionals who think the Government will struggle to implement its right to build scheme, with 26% saying this is achievable and 41% unsure.

CEO of myhomemove, Doug Crawford, says: “Property professionals are clearly concerned about the obstacles that are holding back property transaction numbers. The good news is that the decisive election result could provide a confidence boost to consumers that will mean more properties are put on the market.

“The main housing policies outlined by the new Conservative Government in its manifesto are, for the most part, popular within the industry. The question now is whether the Government can deliver on its promises and how quickly it can do so.

“Some policies, like extending Help to Buy, are far simpler to deliver than others, like the proposed right to build scheme. This will undoubtedly be a big topic of debate at our conference, just one week before the Government sets its policy agenda in the Queen’s Speech.”1

1 http://www.propertywire.com/news/europe/uk-property-housing-supply-2015051810518.html

 

 

New remortgage products for HTB tenants

Published On: May 12, 2015 at 11:33 am

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Categories: Property News

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Homeowners who utilised the Government’s Help to Buy scheme have been buoyed with an announcement from Leeds Building Society.

The Society has launched two remortgage products specifically aimed at buyers who used the scheme to purchase their property. After being the first lender to allow remortgage applications from Help to Buy homeowners, the firm has now extended its range.

New rates

The additional products are a two-year fixed rate Help to Buy product at 2.44% and a five-year fixed-rate deal of 3.14%. These new products are available up to 75% LTV and arrive with fees assisted legal services for standard remortgages.[1]

Alongside these new deals, Leeds Building Society still over their existing Help to Buy mortgages, which are available for remortgage and also home purchase. The deals are:

A two-year Help to Buy mortgage at 1.99%

A two-year fixed rate Help to Buy mortgage at 2.34%

A five-year fixed rate Help to Buy mortgage at 2.99%

New remortgage products for HTB tenants

New remortgage products for HTB tenants

These mortgages are also available up to 75% LTV. Furthermore, all of the society’s Help to Buy mortgages and remortgages are equipped with a low £199 fee.[2]

Better deal

Mark Richardson, General Manager for Business Development at the society said that, ‘the first homeowners who bought under the Help to Buy equity scheme are now coming to the end of their mortgage deals and have their first opportunity to switch to a better deal.’[3]

Mr Richardson went on to state that, ‘mortgage rates are at historic lows at present and the average two year fixed rate mortgage available now is lower than when the Government launched the scheme in March 2013 so borrowers can save themselves some money by switching to a more competitive deal.’ Additionally, he commented that by, ‘minimising the upfront costs of our Help to Buy remortgages assists the type of customer the scheme was introduced for and, unlike some lenders, Leeds Building Society does not differentiate between first time buyers and home movers and our main Help to Buy range is available to both.’[4]

 

[1-4] http://www.propertyreporter.co.uk/finance/leeds-bs-launches-two-new-remortgage-products.html

 

What does the election result mean for housing?

Published On: May 11, 2015 at 9:20 am

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After much intense speculation, extremely close opinion polls and feverish campaigning, the results of the general election are in.

Compilers of opinion polls were left looking rather sheepish as the Conservatives gained enough support for a shock majority victory. With high-profile political casualties already confirmed, what will another five-years of David Cameron in office mean for the UK’s housing market?

We already know that the Tories plan to extend their Right to Buy scheme into housing association properties. It is thought that this will apply to an additional 1.3 million families.

Additionally, there are plans to introduce a Help to Buy ISA to assist more first-time buyers to get onto the primary step of the property ladder. The government will give deposit savers £50 for every £250 saved in a Help to Buy ISA, up to a maximum of £3,000.

What does the election result mean for housing?

What does the election result mean for housing?

 

The Conservatives have also pledged to build 200,000 new properties specifically for first-time buyers under the age of 40%, with a subsidised discount of 20%. There is also a promise for a £1bn brownfield regeneration scheme to create sites for an additional 400,000 houses.

 

Without the need to appease any coalition partners within Government, it is likely that the Tories will implicate further changes to both welfare reform and housing support during the duration of their next five years in office. This said, the shock result has been widely welcomed within the housing sector. Many private landlords were openly concerned by Labour’s proposals to change tenancy laws and introduce rent capping. Many others were concerned about the introduction of a mansion tax to fund new housing.

 

Despite the result being received favourably across much of the property market, there remain a number of problems to address for the new Government. Demand far outstripping supply of homes, spiralling rents and thousands of unoccupied properties are just a few of the issues Mr Cameron will have to address. How successfully he does this will go a long way to defining his second, post-coalition term.