Conservative Government Should Clarify Help To Buy’s Future
Despite myriad political and Brexit concerns reducing confidence in the property market this year, Help to Buy has continued to flourish.
In the opening half of 2019, 25,275 transactions were completed using Help to Buy equity loans.
Despite the increasing political uncertainty, the use of Help to Buy equity loans increased marginally from the 25,139 transactions recorded in the opening half of 2018.
During the same period, UK residential transactions fell from 592,750 in 2018 to 586,740 in the opening half of 2019.
Furthermore, the figures suggest that Help to Buy equity loans were used to fund 4.3% of the total 586,740 housing transactions recorded in the first half of 2019.
With the scheme being restricted to first-time buyers (FTB) from 2021 and scrapped completely in 2023, the government will need to begin focusing more emphasis on what will happen to this vital cog in the current home buying and selling process.
Market experts suggest that greater clarity on the future of Help to Buy would benefit the sector, especially since new build housing supply and developments could be set to increase under a new majority government and the increased market confidence it will instil in the property and construction sectors.
Kate Davies, executive director of the Intermediary Mortgage Lenders Association, commented:
“For months we have seen a government preoccupied with Brexit and political sparring in the run-up to the election. With the vote concluded, now is the time for the new government to really put the spotlight on fixing Britain’s broken housing market.
“This doesn’t just mean building thousands more of the new homes the country needs. The government needs to support a new dialogue with lenders and housebuilders on what happens when Help to Buy ends in 2023. It also needs to recognise the importance of the private rented sector.
“However, even with a Conservative majority the challenges facing Britain’s housing market won’t be tackled by a quick fix. Instead, we need a long-term strategy which provides a coherent and co-ordinated approach to ensuring a sustainable supply of housing in both the public and private sectors, together with a robustly regulated system to ensure that buyers and renters are properly informed and protected.
“This will require significant cross-party and cross-departmental co-operation, with authoritative leadership from the highest level. We would urge the prime minister to ensure that housing is given enhanced status in his new administration, and we look forward to working with the new ministerial team.”
John Newcomb, chief executive of the BMF, said:
“Now the real work begins and we need to see a policy and real action to build homes, eliminate carbon in our housing stock and create prosperity.
“We keenly await news of the appointment of both the next housing minister and climate change minister as they have responsibilities affecting the building materials’ supply chain.”
“On new housing, BMF members want to see unrelenting political determination behind concerted action to simplify and speed up planning approvals for uncontroversial applications to increase housing completions.
“The whole thrust must be implementation, so BMF members can invest confidently in the people and materials and products needed.
“Early clarification on what the future holds for the ‘Help To Buy’ Scheme would be very welcome as a start.”
Michael Stone, Founder and CEO of Stone Real Estate, said:
“We’ve seen many big housebuilders operate on a more hands-off basis of late, largely due to a lower rate of house price growth and a fear of financial underperformance in tough market conditions.
“However, the new build sector has actually been the silver bullet against Brexit uncertainty with those opting to enter the fray rewarded with consistent levels of buyer demand and buoyant sold prices to match.
“With things only about to get better, the new build sector can expect a busy time over the coming year as pent up market apprehension surrounding our political landscape is relieved to a degree, and more homes are built, more homes are bought, and market sentiment receives a well-needed boost.”
How important is Help to Buy to the conveyancing sector? Would increased clarity on this issue help the property sector?