· Busy ‘Autumn selling season’ expected
· Help to Buy reservations pass 12500
Major house builders last week met with Housing Minister Mark Prisk to tell him that the demand side mortgage support measures introduced by Government were working and would lead directly to more homes being built.
The meeting took place as figures release showed that 12500 reservations have been made through the Government’s Help to Buy scheme up to the end of August. The scheme is well on target to deliver the 74,000 homes intended over the next few years. The figures emerge as the industry enters its traditionally busy autumn selling season.
The meeting was an opportunity for the industry to tell the minister how well the mortgage scheme was working; and also discuss what steps could be taken to address the other constraints on supply – the planning system and regulatory costs.
Speaking after the meeting, Stewart Baseley, Executive Chairman of the HBF said; ‘Help to Buy’ has been an unqualified success. It is addressing a lack of mortgage availability- the main constraint on the market, and if people can buy, builders can build. With the traditionally busy Autumn house buying period upon us, all the signs are that the next couple of months will see a significant number of people realising their ambition of home ownership. However, if it is to ultimately lead to a significant and sustained increase in housing supply, Ministers still need to act on the other constraints on supply – a lack of land and excessive regulatory costs.”
Housing Minister Mark Prisk:
"The housing market has turned a corner since the end of the unsustainable housing boom. There are more first time buyers than at any time since 2007, while housing supply is at its highest level since 2008 and growing at the fastest rate for three years.
"As a Government we have worked hard and prioritised limited financial resources to help the housing market through one of its toughest times and create the right conditions for it to flourish. So I'm delighted that developers have pledged to use this momentum to increase output and get Britain building again."
Mark Clare, Chief Executive of Barratt said;
“Customer interest in the Help to Buy scheme has been very strong particularly from customers previously locked out of the market by high deposit requirements. Post the Budget announcement we saw reservation rates increase and partly as a result the number of homes we sold last year was up 20% on two years ago. We are now preparing for further growth and have committed £1 billion to land investment for new homes and we're also expanding the business by taking on 600 new apprentices and graduates to tackle the skills shortage''
Jeff Fairburn, Group Chief Executive of Persimmon said;
“Since the introduction of the Help to Buy measures in April we’ve seen a notable increase in customer interest and visitors to our sites, resulting in a stronger level of sales reservations across England. In response we have increased our build activity to meet this increase in demand. If this early interest is maintained, the Help to Buy Scheme will play an important role in enabling the industry to increase the volume of new homes built over the coming months and years. And in addition to helping the housing shortage this will have wider benefits for jobs and the economy – for example Persimmon has already decided to make significant further investment in trade apprentices this year to support the anticipated increase in output”
Pete Redfern, Chief Executive of Taylor Wimpey said;
“It enables us to build more homes on the sites we have already got open, and also gives us more confidence about investing in future sites and infrastructure which creates more jobs and economic activity locally.”
Help to Buy; The scheme announced in the Budget comprises two distinct parts;
· Equity Loan – this enables the buyers of new build homes in England to secure a mortgage with at least a 5% deposit. The Government grants an equity loan of up to 20%. The scheme is a successor to the FirstBuy scheme that delivered around 10,000 sales up to April this year. It is expected to deliver 74,000 sales over its three year life.
· Mortgage Guarantee – Government proposes to guarantee a portion of lender losses from repossessions on 95% mortgages across the UK housing market from January 2014. The Treasury’s working assumption is that the Guarantee scheme will generate around 190,000 sales per year, equivalent to one fifth of annual UK housing transactions (932,000 in 2012) Read more; https://www.gov.uk/affordable-home-ownership-schemes
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Notes to editors
1. The Home Builders Federation (HBF) is the representative body of the home building industry in England and Wales. The HBF’s member firms account for some 80% of all new homes built in England and Wales in any one year, and include companies of all sizes, ranging from multi-national, household names through regionally based businesses to small local companies: www.hbf.co.uk