- The document discusses the impact of government policies like Help to Buy on the UK housing market. - It notes that prior to these policies, obtaining a mortgage was difficult due to high deposit requirements and restricted lending, slowing the housing market. - Help to Buy has led to increased house purchases, building rates, and more positive attitudes from builders, helping to restart the housing industry. However, some concerns exist around the program's sustainability and potential to inflate house prices.

4. The ai m
•“ r ed t ape over pl anni ng pr oc edur es and m t gage l oans ar e
or
ham
per i ng t he gr owt h of t he house bui l di ng i ndust r y”
•“ al ongs i de t hi s ar e we t ur ni ng i nt o a nat i on of r ent er s ,
m e i n l i ne wi t h t he Eur opean vi ew of pr oper t y owner shi p?”
or
•“ what i s t he i m
pact of Hel p t o Buy ?”

5. Cont ext : t he m ket
ar
•Land val ues r em n l ow and t he econom weak
ai
y
•I ncr eas i ng r at e of pr i vat e r ent i ng, but r ent s not m e
or
expensi ve t han m t gages i n hal f of t he UK
or
•Gover nm
ent ac t i v el y seeks t o unbl ock pl anni ng hol d ups
t hr ough “ At l as”
•2, 291 hom pur chases c om et ed under New Buy ( t o M ch 31)
e
pl
ar
•3, 000 r eser vat i ons per week under Hel p t o Buy: si nce i t
st ar t ed…

6. 17%
12,500
15
%
Help to Buy
transactions
since
launched
3.1%
M
House pr i cesHousi ng st ar t s or t gage
l endi ng

7. Housebui l der vi ews: pr e H2B
The constraint
on mortgages
has been an
encumbrance
to sales
•
The whole market
had started to
stagnate [due to]
large deposits and
restricted lending
on mortgages…
There was a real
shortage of first
time buyer funding
available
The overall
mortgage pot has
shrunk, very
substantially, and if
there is less money
available then
clearly it is going to
go to those parts of
the market that are
high value and
lower risk
After the 2007 property
bubble and subsequent
crash, the market needed
to rebalance. This
happened between 2007
and late 2012. By the end
of 2012 there was a good
match between demand
and availability
Som pl ayer s l ef t t he m ket / m ged and t hose l ef t have l ess
e
ar
er
capi t al

8. Housebui l der vi ews: pr e H2B
•
New Buy and bui l der s’ shar ed equi t y schem
es – l i m t ed success
i
“We had NewBuy come in 18 months ago which was quite a difficult process with banks
and mortgage lenders. That had an immediate effect, [but] slow uptake... The reasons
are the fees payable etc.”
“The problem that we had in the industry was we all had quite a lot of cash locked up in
the balance sheet for these products.”
“The other problem was with us having to contribute half as well; you were basically
spending a lot of your working capital.”

9. Top bar r i er s t o buyi ng
•Hi gh pr oper t y pr i ces, m t gage avai l abi l i t y and di f f i cul t y
or
i n qual i f yi ng ar e t he t op bar r i er s

10. Im
pact s of cr ash
•M n i m
ai
pac t s ar e secur i ng m t gages, i nc r eased concer n
or
about chi l dr en’ s f ut ur e and r et ai ni ng any di sposabl e i ncom
e

11. Im
pact s of cr ash
•M n i m
ai
pac t s ar e secur i ng m t gages, i nc r eased concer n
or
about chi l dr en’ s f ut ur e and r et ai ni ng any di sposabl e i ncom
e
Especially homeowners (67%)
and 45+yr olds (74%)
and C2 (70%)
18-24 yr olds (18%) less likely than
all others
Especially renters (41%)
and younger people:
18-24 yr olds (43%) and <45 yr olds
(32%) more likely than 45-64 yr olds
(9%)

12. Hel p t o Buy
Helpfulness
•Hal f of t hose who have or ar e act i vel y c ons i der i ng buyi ng a
hom have hear d of Hel p t o Buy ( 52% , under a t hi r d of t hese
e
)
t hi nk i t wi l l hel p t hem
.
18-24 year olds
C1 / DE
Renters
HTB applicants/ intenders
AB
Homeowners
55+ yr olds
C2
Awareness

13. Bui l der s’ at t i t udes t o H2B
Helped increase funding availability
Lenders responding positively to HTB
Better than NewBuy/ First Buy
Helpfulness
Positive
Helped to rebuild confidence and competition
in the mortgage market
Enquiries, off-plan sales & building rates
Scope well designed
o
“Good f
b ut n
uilders,
r houseb
How sustainable is it?
Funding may run out before the end of 3 yrs
What happens when it finishes?
s.”
axpayer
ot for t
Negative

14. M t gage Guar ant ee
or
Expected to involve a range of lenders
Lenders offering “decent rates and not restricting it
through other mechanisms”
Helpfulness
Positive
Hope offers may be designed to assist the second
hand market
Controls in place to avoid boom and bust
T&Cs unknown
Too early to say
Scope too broad?
Introduced too late
How long is the quota going to last?
May lead to increased house prices
Hiding an underlying wider market fragility?
Negative

15. Per cei ved i m
pact of H2B
•Over whel m ngl y posi t i v e!
i
“Things have been improving in the
mortgage market over the last period.”
"Definitely is stimulating house building.
The equity loan ticks all the boxes for
affordability of house purchases... it's
given us a much more confident position
than we were pre-budget”
“Increased sales ... Help to
Buy really helped the
market”
“We should get more normalisation, standard 90-95%
mortgages coming back at more favourable rates..”

16. Per cei ved i m
pact of H2B
•Over whel m ngl y posi t i v e… BUT!
i
“We also need a functioning planning system and we need
to tackle regulatory burdens on the industry.”
“I see this as being not in place
beyond May 2015 and the election”
“I think there are a lot of things
happening at the moment, not just
Help to Buy”
“[Lack of] capacity in terms of skills, bringing trades, sub
contractors, suppliers. Also the ability to recruit good staff,
as the industry lost a lot of good staff in the down turn.”

17. Help to Buy: Boom
or Bubble?