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Latest data shows UK Help to Buy scheme has now helped over 73,000
The majority of sales under the UK government’s Help to Buy equity loan scheme continues to be to first time buyers representing 83% of total sales, the latest figures show. The data from the Department of Communities and Local Government (DCLG) also shows that the average (mean) purchase price was £211,566 in the first 20 months since the scheme was launched. The top six local authorities in terms of completed sales are Wiltshire with 664, Leeds at 628, Central Bedfordshire at 581, Milton Keynes at 516, Peterborough at 512, and Birmingham at 465. These figures firmly but to bed concerns that it would benefit people in London and the South East buy higher priced properties and also shows over 73,000 have benefitted. Figures also show that 30,269 households buying new and existing homes through the Help to Buy mortgage guarantee scheme and 5,518 households were supported into a new build home through the NewBuy scheme. The Help to Buy equity loan scheme was introduced along with other Help to Buy products to support people who can afford a mortgage, but struggle to save the deposits required by lenders in the wake of the financial crisis. ‘Our long term economic plan has turned this country around from the one we inherited, suffering from a crashed economy and a housing market where builders wouldn’t build, lenders wouldn’t lend and buyers couldn’t buy,’ said Housing and Planning Minister Brandon Lewis. ‘Now numbers of first time buyers are at their highest since 2007, house building continues to climb and planning permissions are at record levels. All these measures combined are helping record numbers of people into a new home, including 73,000 households benefiting from Help to Buy and we will keep striving to get that total even higher,’ he added. Continue reading
UK housing price growth slowed at end of 2014, index data confirms
House prices in the UK in the last three months of 2014 were 0.3% higher than in the previous quarter and are expected to increase by up to 5% in 2015, according to the latest index report. A monthly rise of 0.9% took the average price of a home to £188,858, the data from the Halifax shows. However, growth is clearly slowing. The quarterly rate of increase declined for the fifth consecutive month and was the lowest since November 2012 when it was 0.3%. Prices in the three months to December were 7.8% higher than in the same three months a year earlier and based on this annual house price growth has fallen from a peak of 10.2% in July and is now at its lowest rate since January 2014 when it was 7.3%. The Halifax expects a further moderation in house price growth over the coming year. House prices nationally are predicted to increase in a range of 3% to 5% in 2015. The index points out that home sales at 98,490 in November were below 100,000 for the first time since November 2013.Overall, sales in the three months to November were 1% lower than in the previous three months. Despite this recent modest decline, sales during September to November were 5% higher than in the same period last year. ‘The deterioration in housing affordability as a result of rising house prices, earnings growth that has been consistently below consumer price inflation until very recently and speculation of an interest rate rise, have combined to temper housing demand since the summer. The weakening in housing demand has led to a reduction in both price growth and sales in recent months,’ said Halifax housing economist Martin Ellis. ‘We expect a further moderation in house price growth over the coming year with prices nationally predicted to increase in a range of 3 to 5% in 2015. Housing demand, however, should continue to be supported by a growing economy, rising employment levels, still low mortgage rates and the first gain in real earnings for several years,’ he added. Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), said that the falling rate of house price increases at the end of 2014 might suggest greater market stability. 'But this should not disguise the need for ground breaking action on housing policy in the upcoming election. Declining affordability has tempered demand and the housing market in its present state is still a long way from supporting the nation’s home owning ambitions,' he pointed out. 'Housing policy is in need of fundamental reform rather than short term voter appeasement that has brought a host of temporary measures and tinkering at the edges without a long term plan. Successive governments have failed to address changing housing needs and left us on a downwards trajectory that will see owner occupation drop to 59% by 2020 if current trends continue,' he explained. … Continue reading
Call for review of UK housing policy
The UK government needs to review its current housing policy and commit to a managed withdrawal of current property market support as a priority, according to the Intermediary Mortgage Lenders Association (IMLA). It has published its criteria for housing and mortgage policy pledges in the build-up to the 2015 election and says that with owner occupation set to fall from 64% to 59% in the next parliament, an ‘open and frank debate’ is needed about whether conservative lending benefits all. The IMLA argues that a clear overarching housing strategy is an essential requirement for the next government. This would replace a policy focus that has frequently favoured short term, eye catching and also conflicting measures over the last 30 years. As a result, successive governments have prioritised specific market segments at the expense of others rather than following a cohesive strategy across tenures and parliaments. In its paper UK Election 2015 – criteria for housing and mortgage policy pledges, IMLA also asserts that regulators’ response to the financial crisis and lenders’ responses to the new rules and their supervision have created a more conservative mortgage market. With owner-occupation set to fall from 64% to 59% over the next five years over the next parliament, the IMLA calls for the next government to ensure a more appropriate balance of choice and protection for consumers, in place of fragmented policies and regulatory interventions. The document sets out five specific requirements that should be tackled by the next government. These include establishing a programme for a properly managed withdrawal of government measures supporting the housing market and implementing a state or privately backed mortgage indemnity guarantee (MIG) to succeed Help to Buy and support high loan to value (LTV) borrowing in the long term. It also includes introducing measures to support downsizing by older households and increase liquidity in the housing market, carrying out a full review of the cumulative impact of regulatory changes for mortgage lending, including new capital adequacy requirements, macro-prudential rules and affordability assessments and engaging in an open discussion on the role of the sub-prime mortgage market in helping to meet consumer needs. ‘There are difficult and worsening housing problems across most of the UK, which mean the housing and mortgage markets will be a dominant issue in the 2015 election. A number of key agendas demand a response from politicians, and the consequences of their actions are likely to be felt for many generations to come,’ said Peter Williams, IMLA executive director. ‘We need to recognise that tenure patterns are changing and there is a wider diversity of housing needs in modern society than ever before. Home buyers face much greater challenges as a result of house price rises and financial services regulation. Private renters are confronted by high rental inflation and variable quality and social renting no longer provides an adequate safety net for those who cannot afford to house themselves via the market,’ he explained. He pointed out that a… Continue reading
