There is widespread evidence of ongoing recovery in the housing and mortgage markets, with numerous surveys attesting to stronger activity, improving house price levels and positive market sentiment.
The first half of the year has been stronger than most expected with house prices increasing steadily. Prices in the three months to June were 2.1% higher than in the previous quarter, edging above the 1-2% range recorded throughout the first five months of the year.
We have also had an update from George Osborne on the next phase of the Help to Buy scheme. The first phase launched in April has been taken up by nearly 7,000 people, resulting in transactions worth roughly £1.3bn.
There are many sceptics who feel that Help to Buy is not addressing the issue of supply as housebuilding is still at a much lower level than the growing demand. As the leading new-build lender, we are working with leading housebuilders to help address this.
The Help to Buy mortgage guarantee scheme, first announced by the Chancellor in the March 2013 Budget, continues to make strong progress ahead of its anticipated launch date in January 2014.
The indemnity guarantee will allow both first time buyers and home movers to buy a home with a deposit of 5% by providing the lender with protection on the loan. We are continuing to work closely with the Council of Mortgage Lenders, the Department of Communities and Local Government and HM Treasury to agree the final details of the scheme
The credit conditions survey from the BoE presents a relatively rosy picture of mortgage market conditions, and one that seems likely to persist through the current quarter.
Whilst market activity has improved it is still low by historical standards with home sales remaining well below their peak levels. What we are seeing, however, is the impact of improving confidence in both the housing market and the economy, combined with a shortage of properties available for sale, which appear to be pushing up house prices. Help to Buy is clearly helping.
Mike Jones is director of intermediaries at Lloyds Banking Group