Advances for house movers hit £5.1bn in September, which is an increase of 8.5% over the previous month and 4.1% over the previous year. And if you focus in on first time-buyers, the figure is £2.5bn for September, which is a 4.2% increase on the previous month and 13.6% increase on the previous year.
As encouraging as these figures are, there is a danger in getting too carried away. They don’t herald a dramatic recovery in the housing market but they do, nonetheless, show a continuation of the gradual improvement that has started to become apparent in recent months. Which is good news.
There is, however, one sector of the housing market that holds particular importance at the moment and that is new build. The country is desperately short of new housing: there were just 104,970 new housing starts in the year to March 2012, compared to a peak of 183,000 in the year to March 2006 and it’s estimated that we need to be building approximately 250,000 homes a year if supply is to meet demand.
But the importance of new housing isn’t just about accommodating our growing population. It’s also about creating jobs, getting the economy back on its feet and developing a housing stock that is energy efficient and cheaper for households to maintain and run. If we want a green and prosperous economy, then the construction industry has an important role to play.
Which is precisely why the government has been keen to launch initiatives such as NewBuy, which is designed to help home buyers (either first or subsequent time buyers) acquire a brand new home with a deposit of just 5%. Aldermore is delighted to be one the banks participating in this scheme and we recently rolled out a range of products which are available via Fairview Homes. We’ll be announcing further links with house builders during the weeks ahead.
NewBuy has had its critics with some saying its been slow to get off the ground and is unlikely to be enough to get the housing market back on its feet. I suggest a touch of realism is needed before being too critical of the scheme. Firstly, the scheme has been launched against a backdrop of one of the most severe economic recessions in recent history - it was hardly likely to set the market on fire overnight. And secondly, its unrealistic to expect one scheme - no matter how good - to turn a flagging housing market around all by itself. NewBuy is just one of a number of initiatives designed to help get the market moving once again, but it is nevertheless a very worthy scheme.
Any initiative designed to help the housing market has to be welcomed and particularly so if it also helps gives the construction industry a much needed shot in the arm. To use that well known phrase ‘every little helps’!
