The demise of the mortgage guarantee scheme, aka HTB2, could help the right sort of homes get built faster. “Help to Buy is there to encourage the homebuilding industry to develop more properties within reach of first time buyers,” said Ross Mansoori-Dari, CEO and Founder of C Group. “For too long, developers have built to satisfy the demand of top end buyers or overseas investors. Now we’re seeing a glut of expensive properties no one really wants.
“Extending the equity loan exclusively to new build properties will ensure that the right type of properties are built to satisfy domestic demand which will ultimately benefit our overall economy and ensure we don’t have any further booms and busts in the housing market.”
By providing more incentives for buyers to consider new builds, limiting the scheme to new properties could also help the industry combat its image problem. “Our own Home Quality Mark survey found that only 4% of respondents thought that the quality of housebuilding was high and only 10% trusted UK housebuilders highly,” said Gwyn Roberts, HQM Project Leader and BRE Homes and Communities Team Leader. “BRE surveys of people that live in recently built homes, come out with much more positive views suggesting there is a large gap between reality and perception.
“There is a different way; custom housebuilders HAB think that most of their clients are part of the 46%, those that wouldn’t normally think to buy a new home. In order to tackle the housing crises, more new homes must be suitable and desirable for prospective buyers.
Greater acceptance of new homes not only can create more sales, but can also help get planning. “Communities are more likely to want better quality, highly sustainable homes that improve the community rather than trample on them,” said Roberts. “This could also impact the availability of land, if new housing is more acceptable land owners may well be more welcoming for development on their land.”
Mansoori-Dari wonders why Help to Buy was ever extended to existing properties in the first place. “From the buyer’s perspective, an older property invariably comes with higher maintenance costs,” he said. “If these buyers are already struggling to get onto the housing ladder, saddling them with additional costs is simply cruel. Having scrimped and saved to buy their first home and to furnish it, who has the funds to replace a boiler or a roof?”
Meanwhile, housebuilders are concerned that the end of the Mortgage Guarantee Scheme has been misreported. “It’s vital that potential homebuyers know that the rest of the scheme, the popular equity loan product, is still very much alive and kicking and able to help them secure a home with just a 5% deposit,” said Andrew Swindell, Managing Director at Barratt Homes Northampton.
The average purchase price of a new build bought under the scheme is £226,887, with more than 80%, being used by first time buyers to get on the property ladder. “Since the scheme launched we have been able to help thousands of homebuyers get on the property ladder which has been fantastic,” said John Dillon, Managing Director at David Wilson Homes South Midlands. “We hope that we can now reassure people that despite all of these rumours help is still out there and they can take advantage of the equity loan part of the scheme.”