You are here: Home - News -

Five months on, Help to Buy still going strong – Halifax

by: Mike Jones
  • 06/03/2014
  • 0
Five months on, Help to Buy still going strong – Halifax
Critics may discount the merits of the Help to Buy scheme, but it cannot be argued that the housing market didn’t end 2013 in a much stronger position than it started.

Just over five months on from the launch of Help to Buy 2, we’re continuing to see strong levels of interest. We were the only lender offering Help to Buy 2 mortgages through brokers at inception in October 2013 and we are still seeing a strong flow from intermediaries.

There is clear evidence that the scheme is working as intended in helping those who can afford the monthly payments but until now, have not been able to raise the necessary deposit.

With more lenders joining the scheme at the start of January, we will no doubt see an increase in competition, particularly as the Bank of England has been keen to signal that Base Rate will remain low, which will in turn help to support low mortgage rates and, therefore, housing demand.

There has been much debate about whether Help to Buy is creating a bubble in the London housing market. It simply isn’t true.

Whilst London has led the housing market recovery during 2013, Help to Buy 2 and other products have led to a broadening of the recovery and indeed our evidence shows that 8 in 10 applications have been from borrowers outside London and the South East. The London market is driven by a number of factors, but Help to Buy 2 isn’t one of them.

We’ve also seen trading updates from Britain’s largest housebuilders show that demand is increasing for their properties too. Help to Buy 1 and 2 should continue to stimulate housing demand in 2014 by helping potential buyers, who have been struggling to accumulate a sufficient deposit, enter or move up in the market.

I know that many brokers hadn’t thought it worth investing time in familiarising themselves with the various government initiatives in the past – my clear advice to any remaining doubters is that Help to Buy 2 is very mainstream and worthy of your attention.

Mike Jones is director of intermediaries at Lloyds Banking Group

There are 0 Comment(s)

You may also be interested in