Buyer incentive schemes – a mass of confusion?
Gemma Harle is managing director of TenetLime
The government’s latest housing incentive scheme, ‘Help to buy’, was announced in last month’s budget, but whilst any incentive must be viewed as good news, what advantages does it offer and will it really make a difference?
The devil will doubtless be in the detail, but the casual observer could be forgiven for thinking that it is broadly similar to previous incarnations and that the plethora of choices available only serves to complicate.
Help to buy is essentially an extension of the government’s ‘First buy’ initiative and will sit alongside the shared ownership ‘Home buy’ scheme and the ‘New buy’ mortgage incentive scheme (which in the first four months after its launch in early 2012, only generated 250 house sales).
Anything designed to stimulate the market has to be viewed as good news, but such initiatives will struggle to succeed without other key fundamentals in place. Lenders need more capital and be able to offer higher LTVs and a lot more housing stock must be made available. So perhaps we shouldn’t be getting too excited just yet.
Without a unified approach, the raft of schemes available just serves to create a mass of confusion.
Take lenders for example, who all off a range of different products for the schemes they are involved with. Some limit the distribution of these products through a few selected intermediaries, while others allow all intermediaries to access their products. How confusing does that make things from a consumer perspective?
Brokers have to cope with a plethora of both old and new schemes and a huge variety of options from lenders. To be able to offer the right advice requires training and possibly even new qualifications.
Out with the old and in with the new might sound like a great idea, but if the previous version still works, why not retain and re-inforce it? Would it not be better all round if lenders were encouraged to learn from the mistakes of the past and work together to create some common ground for products and support?
Of equal importance is the need for some form of definitive guidance to enable brokers – and consumers alike – to work their way through this mortgage minefield.
And when you take into consideration that the schemes in question are primarily aimed at those consumers are first-time buyers, they, above all, require the very best advice and expert guidance – having had no previous mortgage experience.
So although whilst not wanting to dismiss the latest attempt to stimulate the market and accepting that, right now, every little helps – will ‘Help to buy’ end up just being one small step, or a giant leap?