Mortgage News
Nationwide: Help to Buy mortgage guarantee will fuel builder confidence
The current pick up in housing market activity offers builders a “natural incentive” to crank up the supply of new homes, Nationwide’s chief economist has said.
The mutual expects the Bank of England to keep the base rate low until November 2015. While it does not make future lending forecasts, it expects lending will grow over the next few years, before possibly levelling off as stimulus measures such as Help to Buy expire.
Speaking at the Financial Services Expo at Old Billingsgate, Robert Gardner (pictured) said while it was hard to gauge the impact of the second part of Help to Buy, the scheme aimed to fuel builder confidence as well as increasing the availability of credit.
He said: “Part of the idea of the scheme is to encourage builders to build with
the confidence that if they build homes there will be buyers out there.
“There is already a natural incentive for builders to increase their volumes. Demand is there, prices have been increasing – it is in everyone’s interest to get an increase in supply.”
However, Gardner said there were questions about what would happen to the labour market: “It is important to recognise that when you are looking at what is likely to happen, credit availability is only part of the story.
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“What happens in the labour market is important in terms of first-time buyer demand going forward. What is going on with wage growth is very important.”
Meanwhile, a Bank of England panel reported this morning there was no evidence increased consumer demand for mortgages aided by the FLS and Help to Buy was converting into an increased supply of housing.