The conference got off to a lively start with the Prime Minister announcing on Sunday that the government would bring forward the start of the Help to Buy mortgage guarantee scheme to as soon as next week.
Clearly this sparked a lot of discussion around the conference corridors and bars and Halifax, Royal Bank of Scotland and NatWest all confirmed their intention to participate.
In reality, those lenders that had confirmed their intention to take part always expected to be developing products and marketing in the autumn ahead of the scheme actually beginning in January. If lenders did nothing until January then the first completions wouldn’t start to trickle through until late February or early March.
It is clear that the government is right to focus on the need for a range of mortgages to be made available to creditworthy borrowers with a deposit of 5% or more, the BSA’s latest property tracker consumer survey shows that raising a deposit is still the biggest hurdle to overcome when buying a home, although it is helpful to note that this has fallen from 61% in June to 59% in September.
In my opinion the publicity surrounding both aspects of the Help to Buy scheme has helped improve consumer confidence and drive home the message that lenders are open for business.
As I have mentioned before, a range of mutual lenders are already lending to borrowers with a 5% deposit, lenders will decide whether to participate in the scheme in due course but if more lenders enter the market with providing mortgages to those borrowers with smaller deposits then the government will have achieved its aim. Whether those mortgages are advanced within the scheme or outside of it will make no discernible difference to the borrower.
It is certainly welcome that some of our largest banks have stated their intention to return to the market as part of the Help to Buy scheme, but I am certain that building societies and other mutuals will continue to support prospective home owners to achieve their aspirations.
Paul Broadhead is head of mortgage policy at the BSA
