I have previously spoken about how the Government Backed Help To Buy Schemes have given a welcome boost to the property market and helped thousands get on the property ladder.
I also expressed my concern that the boost could also artificially inflate property values and there is now concern that this is happening, with views being expressed that the scheme could finish before its expected expiry in 2016.
Some of the data and figures coming out of the lenders and the Council of Mortgage Lenders makes encouraging reading-Halifax recently said that had completed over 1,000 transactions through the Help to Buy mortgage guarantee scheme since its launched its range nearly four months ago.
Between 11 October and 31 January the lender received over 5,000 full applications through the scheme totalling £791m. Halifax mortgages director Craig McKinlay says: “To have already helped over a thousand customers receive the keys to their new homes shows that the scheme is making the property ladder more accessible to aspiring homeowners and homemovers”
“The fact that Help to Buy is benefiting buyers in every region in the UK is testament to how it is helping those that can afford the monthly payments, but had not previously been able to get the necessary deposit.”
We have also seen an upturn in enquires and subsequent applications for the scheme and although not the cheapest products, the scheme is helping.
Though despite the positive lending, concern is growing amongst lenders and brokers and in a recent survey there was a belief that spiralling house prices will force the government to pull the plug early on the help to buy scheme.
Research by the Intermediary Mortgage Lenders Association, a group of banks and building societies that offer loans through brokers, found increasing concern that part of the scheme could end before its three-year term.
Half the brokers and 46 per cent of lenders predicted an early finish to the part of the scheme which allows purchasers to buy a property with a 5 per cent deposit. Just under 70 per cent of lenders said they expected the scheme to be derailed by rising house prices.
‘These findings throw the spotlight on crucial policy decisions that must be thought through to safeguard the recovery in mortgage lending and house building,’ said Peter Williams, the executive director of IMLA.
‘Whether or not the scheme runs its full course is less important than making sure we have a self-sustaining market in place going forward. ‘The evidence suggests that we have an entrenched mortgage market recovery which can survive its withdrawal.’
Let’s hope so!
