Marijana No Comments

Danny Belton: Housing associations could replace the Help to Buy scheme

Help to Buy could be replaced with institutions or housing associations launching similar schemes, Danny Belton, head of lender relationships at Legal and General Mortgage Club, has suggested.

Help to Buy is currently set to end in 2020 and the government has yet to announce an extension.

Belton said: “Help to Buy has been tremendously well received. It’s added value but it’s difficult to say whether it should it should stay.

“Anything could happen. If the government stops it, we may see other institutions, or people wanting to invest in the financial market, try and put something in that space.

“And Help to Buy is different in England, Wales and Scotland so maybe housing associations could do something different for their regions. I assume the Government are weighing it up and making a decision. We’ve got a bit of time.

“The bigger issue is helping those customers remortgage from Help to Buy.

“The problem is we’re now five years down the track from when customers first took Help to Buy so now they will have to start paying interest to the government on the part they own.

“There’s limited options available to those customers and we need more. We need more lender support and education for the brokers so they can help.”

Belton suggested one solution could be new build and stressed how important it is for Legal and General.

He said: “We’ve actually enabled more lenders to come to the market with strong propositions that have the right offer time and take into account builder incentives and offer right LTVs on both houses and flats.

“We as a country are in need of more houses. The volume of properties owned outright is now greater than the number of properties with mortgages on them. The only way to change it is to build more houses.

“The government has set their own targets for new build. We won 100% of Cala Homes and we have our own factory in Sheffield for modular housing.

“It’s an important topic for us and the country. It’s all very well building all these houses but you need the lending for them too.”

He argued the two areas seeing the most growth are later life lending and specialist lending, including second charge.

Later life involves equity release and helping older borrowers that still fit the traditional mortgage continue with their interest-only type deals. And by specialist sector, he meant second charge deals and consumers with complex incomes.

He said: “Later life is a growing market, partly because of products improving, the older generation being fitter and stronger and having a desire to keep working and people realising you can use equity release for many different reasons such as home improvements.”

Belton thought second charge deals can be great for customers and brokers are just becoming more aware of them.

He said: “Second charge deals offer really good solutions for a number of customers. I see that market growing a bit but I see specialist lending in general growing.

“A lot of it is awareness and they’ve catered for this complex income environment as well as those with credit issues in the past.

“Ultimately there are certain customers such as serial debt consolidators that actually shouldn’t but there are a lot of people that just had other circumstances.

“These lenders have recognised that opportunity and awareness and have a good criteria, service and competitive rates, pretty close to high street rates.”

“In today’s market with a flat transaction levels, the view is we need to be more holistic advice and we place those deals with the right lenders. It’s a change in mindset more than anything else.”

Belton predicted Legal and General growing its volumes and adding more lenders to its panel.

Belton said: “We’re seeing the product transfer growing as well. In 2017, there was £25bn worth of product transfers being written by intermediaries and this year that could double to £50bn. A lot is down to how brokers use that market.”

Source: Mortgage Introducer

Marijana No Comments

Help to Buy scheme extended to help 4,000 on to property ladder

A scheme to help people buy a new-build home is to be extended for a further two years.

The Scottish Government is to invest an additional £100 million in its Help to Buy programme from April 2019.

The extension will assist up to 4,000 people looking to purchase a property without the need for a large deposit.

Since its launch in 2013 more than 12,000 households have benefited from the scheme, the government said. Housing Minister Kevin Stewart said it had also supported around 9,000 jobs. He said: “A third of the annual £50 million budget – £18m – will be reserved for sales from SME builders, who were particularly affected by the drop in development finance after the financial crisis.

“We know house builders still see Scotland as a place to continue to develop and invest, with the latest figures showing new house completions grew by 5 per cent over the last year. “Housing is about more than bricks and mortar – we want to provide safe, warm homes, help create a fairer Scotland, and preserve a diverse and more resilient construction sector.”

Nicola Barclay, chief executive of the home building industry body Homes for Scotland, welcomed the announcement.

She said: “It clearly demonstrates that the Scottish Government supports the aspiration of home ownership and recognises the real challenge that continues to face prospective buyers in terms of the size of deposit they require to achieve this goal.

“This additional funding will provide our member companies with the certainty they need to invest in and open up new sites and expand the number of homes available to new purchasers.

Crucially, just as the scheme’s extension will ensure even more people can buy a home, it will also ease pressure in other parts of the housing market.”

Source: Scotsman