Speaking at the BSA Annual lunch last Thursday, David Cutter, BSA Chairman and Group Chief Executive of the Skipton Building Society questioned whether the Help to Buy scheme was needed.
He noted that so far no building societies have signed-up to the scheme, whereas all the major banks and a few challenger banks have done so.
He questioned whether the scheme was ever needed by building societies as many have been consistently lending in the lower deposit space for months and some for years.
Mr Cutter said: “This year, one in every three loans by a mutual lender has been made to a first time buyer, accounting for 31% of the whole FTB market. 29% of these loans were made at 90% loan to value or above.
“And there are no signs whatsoever that our performance has been based on reckless lending. As Standard & Poors said last year “building societies survived the financial crisis in better health than the UK banking industry as a whole, grounded on franchise stability; prudent management and customer deposit-based funding profiles”.
“Since we met here last year, and typical for the UK, we seem to have moved from the language of“mortgage famine” to cries of “house price bubbles and over-indebtedness”. The reality lies in the grey area in between.”
He spoke of his worry that Help to Buy was causing confusion for a number of consumers. He pointed to a recent survey that showed 43% of first time buyers and home movers showed did not fully understand the scheme.
He went on to say: “Ultimately, the only thing that that will be a counter-balance to unaffordable house prices, the factor that locks so many first time buyers out of the market, is to build more homes.
“There has been a modest uplift in new housing starts, but nothing yet approaching what we need. In their turn house-builders blame the planning system, something over which Government has control.
“Whatever the block or blocks are, this is something that must be resolved if our growing population is to be housed.”
