Attitudes reflect current tenure (e.g. Owners more positive about buying than renters; renters more positive about renting, also younger) and life stage (e.g. Younger more likely to see buying as an important part of future financial planning â but they (and renters) are also more likely to consider pricing too uncertain to consider buying)
18-24 25-34 35-44 45-54 55-64 25%29%23% 11% 7% want to get a home with a mortgage/ remortgage
And anecdotally the bank of Mum & Dad is/ has been crucial in helping younger people get a mortgage deposit togetherNumber of first time buyers up â âThe number of first-time buyers rose to its highest level since 2007 in May, according to the Council of Mortgage Lenders, after banks and building societies became more willing to offer loans to borrowers with small deposits.A total of 25,100 loans were granted to newcomers to the property market during the month, a 29% increase on April's figure and up by 42% on May 2012, the CML said.It was the highest monthly figure recorded since November 2007, shortly after the property market peaked and house prices started to fall, and a marked contrast to the 8,500 loans granted in January 2009.â Guardian 12th July 2013Home ownership peaked 69% in 2001, fell t0 64% in 2011 and expected to have fallen further since then http://www.guardian.co.uk/money/2013/jun/28/new-class-landlords-profiting-generation-rent. Social renting down from 31% in 1981, private renting up from 11% in 1981â both 18% in 2011. Private renting up from 10% in2008 (crash) to 15% in 2011 and i same time the proportion owning a home with a mortgage fell from 40% to 35%. (ONS) http://www.bbc.co.uk/news/uk-21697044. Unaffordable rents - Resolution Foundation âThe report, Home Truths, found that in 125 of Britain's 376 local authorities, a couple with a net income of ÂŁ22,000 a year and one child would have to spend more than 35% of their income to rent the least expensive two-bedroom property, making it unaffordable to live there. In 10% of local authorities rent would soak up more than half the family income after tax.. In 2012, the Joseph Rowntree Foundation calculated that a family with one child needed ÂŁ19,510 after housing and childcare costs to have enough money for basic necessities..â http://www.guardian.co.uk/money/2013/jul/15/private-rents-price-out-poorer-families 160713Most stats from Savillsâ A demand for residential development land, 14 May 2013Rent levels http://www.independent.co.uk/property/rising-rents-price-poorer-working-families-out-of-a-third-of-britain-8708938.htmlReservations stats = FT http://www.ft.com/cms/s/892bf0bc-b897-11e2-a6ae-00144feabdc0,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F892bf0bc-b897-11e2-a6ae-00144feabdc0.html&_i_referer=#axzz2YT0qQRPl-
From 2007, builders attempted to overcome restrictions on lending by offering shared equity schemes
High property prices â esp younger and C1 C2, also Scotland, NW, Wales & SELack deposit â esp younger, E Mids and Wales , less NE, W Mids, Eastern and SWAlso qualifying esp 35-44 yr oldsLack mortgage availability - esp 18-24Lack property esp AB, W Mids, SE least for WalesFalling value â less for 18-24 and NE & Wales, more for NW, W MidsNo barriers â least for younger & NW, more for NE
Lack deposit differences drop outPrices more of a major issue for rentersQualifying major issue esp for private rentersLack property more issue for ownersHome value falling an issue for mortgageesNo barriers for owners up, but drop for renters
Perceived impact on ability to secure a mortgage greatest amongst lower social grades
Better than NewBuy: "I think it's very important as it enables consumers to buy where they previously couldn't but the reason why its a better scheme is two fold - one is that it is less constricted by a lot of the rules that were put in place on previous schemes, the value of the purchase is probably the most important one but that is now set at ÂŁ600K, so that cap means an awful lot of the product we build qualifies." secondly is the point that housebuilders now doesn't have to share in the funding of the schemes - its not on their balance sheet "and this is why this scheme has got off to a much stronger start than previous schemes - its not constrained in the same way." AnonBetter than NewBuy: Because HCA cut their teeth on the First Buy schemes they were quite well honed for HtB. When we registered online for HtB we had an option where you could request a fast approval process which we did and they turned it around quicker than the normal time frame which was welcome. Anon (NB NewBuy was âtortuousâ)"Help to Buy is fantastic as it stimulated growth but realistically it can't go on stimulating it.â AnonThinks it is a well designed product "and the reason that we're able to use it a lot more than previous schemes is that when we sell a house, under previous schemes we would have had to put a share of the equity on our own balance sheet, under this scheme we don't need to do that - so basically the government is taking the 20% - previously we were sharing it so there was a natural inclination for the housebuilder to limit the use of those schemes because the basic model of the house builder is not to buy land, build a house on it and then keep some of it on your balance sheet." AnonYes, I think so, because it is recognising the fact it is not just first time buyers who are affected by the issue. It is about being able to immediately provide enough equity to push into purchasing a new home for those who are quite able to sustain the mortgage over time. That was sensible. Clearly they have looked at ways to support the market as broadly as possible. Over time there has been a recognition that the issues affecting the housing market activity have been wider than first time buyers. If you can find a way of supporting the market more generally, that has the right bounds, then that is sensible to look at... [If we were looking at any potential drawbacks, or negatives of the equity part on the broader property market, have you any thoughts here? There are obviously discussions in the media, perhaps for example that it could lead to artificial stimulation of the market, a kind of boom and bust bubble.] We donât see that with the equity loan scheme as it is specifically for new builds. It will always translate into additional sales and companies will always respond to that and build more units than they would have done otherwise to meet the demand. If you look at the market as a whole then new build is only something like 10% of total sales transactions so it is fairly unlikely there would be any overall impact on house prices. The fact that in the new build sector there will be a build response to the attractiveness to the scheme will also be a safeguard against that being a worry John SlaughterDirector of External AffairsHBFâThe fundamentals of HTB are good for housebuilders, but not for taxpayers. Spending [the HTB spend] ÂŁxbn on infrastructure such as affordable homes, potholes, rail etc. would improve demand, but HTB is designed to build people's confidence in the run up to the 2015 election. So wider industry has been suppressed by this Government action. Shared equity was already offered by housebuilders, but HTB has reduced the amount housebuilders have to hold as stock, so the whole mortgage market is now more liquid. However the downside of HTB is that house prices will go up as a consequence and there is fear of what will happen when HTB stops. Currently there are not enough lenders supporting HTB mortgages because the lenders find HTB slightly unusual and some lenders feel that it's not enough to sway the balance between the strengths of the customer to repay the loan and the value of the loan.â John Anderson Kier Group"So its certainly a fantastic initiative that has been put in place and one that we're taking full advantage of " Main benefits are whether you're a 1st or 2nd time buyer "you have access to secure a property with just a 5% deposit." Also benefits a substantial number of people over NB or the MGS - is because it does 2 things - it reduces the amount of loan you require, then, because it is so popular and well received by the lenders, then it actually reduces the interest rates on it . so whether you go with NB or the EL scheme, - you take a 75% mortgage out, which is a lot lower and also you're paying nearly 2% lower on interest rates "so in affordability it's a massive advantage." Kevin BelshamDirector of Sales and MarketingTaylor WimpeyThe Government is only going to have to part with cash if there is an intervention / possession and they have to make up the difference. So that scheme will probably last a number of years. Help to Buy wonât be sustainable from a treasury point of view after the first 3 years. Itâs not just about the Government, the banks have to take on responsibilities with regards to rates. They are making decisions about the size of their mortgage book and too much risk averse lending happening. Need to find a happier medium. Graham Cope , RedrowNo, the timing and scale are wrong - there were shared equity schemes before, but these were restricted - e.g. The type of buyer, the number of bedrooms, .. It was a more affordable scale. John AndersonMD Kier Homes
John Slaughter, HBF
Nb any differences by geog, tenure, demogs
And HTB are equally likely to think getting a mortgage has become more difficult since the crash
âWe should get more normalisation, standard 90-95% mortgages coming back at more favourable rates. That would be a reasonable point to stop these schemes....â Anon âA much higher than normal seasonal sales rate. I am convinced when you look at the sales, this has been driven by the HtB introduction.â Anon
So, given these constraints, is there a bubble coming? .....
So donât foresee the house price bubble and bust if limited to new builds only (as they account for 10% of market) and because the market was so depressed before. â As a trade association, what we will be looking to do is discuss a sensible way in which we can work through the scheme to maturity and what lies beyond that with Government. It would be premature to say any one has a specific answer to that, but we are very clear that it would be sensible from the point of view of all parties that you know how you want to unwind these schemes when they reach the end of their life. We need a better understanding in practice of how the mortgage market generally is evolving and maturing as we go through that period. The reason these measures have been looked at is because we were facing a very difficult financial situation it has taken a long time for the mortgage and financial market to recover from. There is a lot to factor in to how one would look at the world in 3-4 years time and I think we canât pretend to have all the answers at the moment, but we are clear on the kind of conversations that all parties will need to have to ensure the schemes produce benefit now, and also lead to the right business climate for the future.â John SlaughterDirector of External AffairsHBF
Targets seen as ambitious by some buildersMost builders & experts expect targets to be met But other builders do not know yet as it is too early to tell, despite a strong startâThe banks have to change their attitude to lending." AnonâThe banking side could be improved. I think the banks in some cases are in some cases reluctant, or not very clear about their product.â ...[Are we talking major lenders, or smaller regional ones?] No it is the major lenders. âThe banks generally have not been great at supporting innovative mortgage products. They are getting better, and helped us better than say New Buy and First Buy. I think the banks need to be more engaged in the process.â Anon
Scope narrowing - e.g.: Properties with a top value of ÂŁ300k, rather than ÂŁ600kFirst and second time buyers only Geographical limitsDonât know if its life expectancy is right or not â too soon to tell
A higher proportion of current homeowners, ABs and over 55 year olds are aware of HTB â is it being appropriately targeted?But only a third of those who have heard of âHelp to Buyâ think it will help them to buy a property:Least help to those with highest awarenessBut those who may be in greatest need (younger, renters, C1, DE) appear more likely to think it will help and more likely to apply HTB does not appear to have yet affected the publicâs perception of increased difficulty in getting a mortgageHTB cannot assuage potential buyersâ concerns over the future value of their home falling â this may limit HTB take-up
Lack deposit â esp younger Also qualifying esp 35-44 yr oldsHigh property prices â esp males and C1, also NW, London & SELack property esp AB, NE, NW least for London, SW and SENo barriers â least for younger