A £3.3bn housing deposit
Brian Murphy is head of lending at Mortgage Advice Bureau
What would you do if you had £3.3bn to spend? Even if you are of royal breeding or a business tycoon, it’s a hefty sum to have at your disposal.
But when we are talking about the UK’s housing shortage and that £3.3bn is part of a £100bn government commitment to the nation’s infrastructure, it starts to look a little less impressive.
Don’t get me wrong: the promise of 165,000 new affordable homes by 2017/18 should not be dismissed lightly. When recent talk has focused on the less tangible aspects of the market – rates, loans and guarantees – here is a solid commitment that we can picture in terms of bricks and mortar rather than numbers on a balance sheet.
The Treasury has set out to entice long-term private investment in the sector and provide the confidence to build new homes over the next decade.
The fact that 4,000 new homes have been sold in the first two months of Help to Buy suggests a real hunger for new build property among the general public, which is driving active buy-in to the scheme.
The Home Builders’ Federation reports that projected levels of activity have been revised upwards as a direct result of Help to Buy: positive news for the whole economy and for jobseekers as well as homebuyers.
The Homes and Communities Agency has also indicated that 400 house builders are on board, while four major high street lenders – Halifax, Woolwich, Natwest and Nationwide – are now supporting the equity loan scheme.
Is a picture emerging where government, builders, lenders and the public are all pulling in the same direction? The signs are encouraging but more hands make for lighter work and it is vital to steer the direction of growth rather than letting it control us.
More lenders throwing their weight behind the Help to Buy equity loans and mortgage guarantees will bring extra choice and competitive pricing to the marketplace.
Greater private investment in house building is absolutely essential as well to support the government’s aims and also keep rising property prices in check.
The year to date has heralded a golden age of mortgage rate reductions.
With property back in demand we must make sure it doesn’t become a false dawn for those aspiring homeowners who – unlike the government – have rather less than £3.3bn to put down as a housing deposit.