May 29, 2013

Brian Murphy is head of lending at Mortgage Advice Bureau


Anyone studying the headlines about the Help To Buy scheme in recent weeks can’t fail to have noticed their see-saw momentum.


One minute things are looking up as new lenders join the scheme, and the next they are back down again with concerns over a potential house price bubble and the need for an exit strategy.


There is no question in the meantime that activity has increased since George Osborne announced the latest government remedy for the mortgage and housing markets.


It is not just industry commentators who have been kept busy; the house-buying public has also responded in numbers. While the analysis continues, a growing interest in the availability of equity loans has seen Help To Buy get out of the blocks far quicker than the New Buy scheme did before it.


Of course the greater the intervention is, the more there is at stake for government and the wider industry.


Schemes like Help To Buy will always attract criticism but it is encouraging to see a growing sense that the market is opening up to new buyers.


Despite the mortgage guarantee part of the scheme still being a work-in-progress, purchase mortgage applications across all properties rose by 13% in MAB’s most recent National Mortgage Index.


No-one wants to discount the potential impact on house prices or see another cycle of ‘boom and bust’ in the property market. Specialist brokers have a vital role to play in managing interest in the scheme and the expertise of the surveying community is an effective safeguard against artificially inflated prices.


The Homes and Communities Agency (HCA) has already stepped in to emphasise the importance of clear advertising and all organisations involved in Help To Buy have a role in ensuring any success for the scheme does not become counterproductive.


Looking ahead, Help To Buy simply has to stimulate better performance in the construction sector and improve on recent production figures.


There is some cause for optimism already with one major housing developer reporting that 400 reservations were received in the first month after Help To Buy launched. It is also encouraging to see the same developer committing to support over 600 graduates and apprentices over the lifespan of the scheme.



If all goes to plan, then by the time they graduate, these new entrants should be able to look forward to a long career in an industry which has returned to health and sustainable growth. The government’s commitment is certainly bold, but only time and collective effort will decide how well advised it has been.

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