"Help to Buy has been successful in getting first-timers into new-build property and the Deposit Unlock scheme is tailor-made to take over."
It has been a busy week for the Home Builders Federation. Last week, it published its Budget submission, and this week it was meeting the Chancellor, Jeremy Hunt, with some of the biggest house builders/developers in the country to no doubt discuss a wide variety of issues that make for such a challenging market at present.
One of those topics under discussion will have been the end of Help to Buy, what might replace it, whether there would continue to be Government involvement or indeed a new scheme, or whether the support of the State might actually be better off being put behind a scheme which already exists, has come from the industry and could be the next step in getting more first-time buyers on the property ladder.
To my mind, it seems somewhat ludicrous to allow a Scheme to finish only to replace it with another Government-backed Scheme which would effectively do exactly the same again.
That becomes even more redundant as a policy when there is a scheme already, Deposit Unlock, which I should say AmTrust/Qualis is heavily involved with, and currently works with a growing number of developers, the HBF itself, and (hopefully) a growing number of lenders, and which could be the natural replacement for Help to Buy.
There’s no doubting that many first-timers still require support/help but I’ve been at pains to say for many years that an industry-led solution should be far more attractive than one reliant on taxpayer’s money.
That’s not to say that Government support wouldn’t be welcome, but that support should probably now come in the form of educating and signposting potential new buyers to Deposit Unlock, and perhaps bringing a little more pressure to bear on the UK’s lenders to now join the scheme, especially as Help to Buy is effectively over.
Interestingly, the number one ‘area for attention’ in the Home Builders Federation’s Budget submission is 'Tackling intergenerational unfairness: Making the housing market work for all’, with a call to both help first-time buyers on to the housing ladder and increase the supply of retirement housing.
Of course, these are inextricably linked because, as we know, there are significant numbers of existing properties which are not currently being fully utilised. Large family homes where only one or two older homeowners live which, if the market was functioning properly, could be ‘passed down’ to those who want and need them.
However, as we know, not only is there an emotional cost to moving out of a property when older, but the financial cost of doing so is perhaps even higher. There aren’t enough affordable ‘retirement properties’ to move into, crucially in the areas where older people want to live.
Plus, as mentioned, the cost of moving is so high, and this is why a number of organisations have been calling on the Government to introduce a stamp duty holiday for those downsizing, although again there has to be the properties available for these owners to downsize into.
If anything as, for example, later life lending and equity release becomes more ingrained as a strong option for older homeowners and particularly as we see the social care system not working as it should, it is actually more likely that people will stay in their properties rather than move out. Particularly with a lack of options available to them and the high cost of moving.
In a sense, given this ongoing situation in terms of ‘available’ second-hand homes, it is perhaps not surprising that so much focus has been placed on the new-build market as one of the only options for first-timers. Not only have there been the schemes available for them to access in this space, but there have simply been less housing options available to them within the second-hand property market.
Will that change much in the short- to medium-term? Probably not. As always, changing the status quo within the housing market can take time, maybe even generations. However, Help to Buy has been successful in getting first-timers into new-build property and the Deposit Unlock scheme is tailor-made to take over.
At the moment, there are there lenders participating in the scheme – Accord, Newcastle BS and Nationwide BS – and, it won’t need me to outline, that the more active lenders we have, plus more developers from right across the country, the more first-time buyers we will be able to move into new homes.
A new website has been recently launched – www.deposit-unlock.co.uk – which has information for buyers, builders, lenders and brokers, so please visit and learn how it might help your clients. More demand will undoubtedly mean more lenders and more activity – there is a chance here to fill the Help to Buy gap and to continue supporting those who only have low deposits to fulfil their wants and needs to own their first property.
