IMLA Concerned Over Potential Help To Buy Changes
The Intermediary Mortgage Lenders Association (IMLA) have warned that withdrawing the Help to Buy scheme could destabilise the first time buyer lending levels that have recovered to pre-financial crisis levels.
IMLA, that represents 43 banks, building societies and specialist lenders, has advised the government to provide clarity on HTB and the Equity Loan Scheme to avoid unnecessary disruptions.
Since its launch, the equity loan scheme has seen 81% of 170,000 new homes purchased by first time buyers in the UK. Of those purchases, IMLA believe that 43% would be unable to have completed the transaction without the HTB scheme.
Because of the scheme, mortgage approvals for first time buyers has also increased by 34%, highlighting the importance of the scheme to this sector of the housing market.
Although a review into HTB may be required by the government, IMLA caution against a policy ‘cliff-edge’ announcement that could alienate too many first-time buyers and significantly slow down the market.
Kate Davies, executive director at IMLA, commented: “We are concerned that funding for HTB is due to be withdrawn in 2021, and that there has as yet been no clear signal as to what, if anything, might replace it.
“Given its success – and its importance in boosting both home ownership and housing supply – we believe that some form of government support should continue.
“Lenders and borrowers place heavy reliance on the scheme, and a major step-change to arrangements would risk significant market disruption and potentially undermine the Government’s ambitious targets for new housing supply.
“If changes to the scheme are being proposed, lenders will need appropriate notice in order to plan ahead and deliver positive outcomes – hence our wish to have clarity as soon as possible on the Government’s intentions.
“We look forward to hearing the Government’s plans and to working closely to continue the development of what has become a key element of housing policy.”
What would change to the help to buy scheme mean for the conveyancing sector?