Autumn Statement 2015: London Help-to-Buy is the 'right approach'
The Building Societies Association (BSA) responds to 2015 Autumn Statement
The Government has recognised that it needs to get creative on home ownership. Today's announcement on their approach to Shared Ownership takes a step in that direction. It would benefit young people and families especially if this form of tenure went mainstream with a viable secondary market. A number of building societies are already active in this type of lending and have collectively funded around 50,000 shared ownership mortgages.
We also welcome the addition of London Help-to-Buy which takes much better account of the high prices in the Capital. The extension of an existing scheme is the right way to approach this - simplicity sells - both for lenders and buyers.
The approach to buy-to-let is rather more controversial with two sides to the issue - first time buyers and those needing to rent. Around a third of all private rented properties in the UK are funded through UK buy-to-let mortgages, and a housing market based primarily on home ownership cannot meet the needs of all of the population. A thriving housing market includes a range of tenures which give consumers a choice, for some the flexibility of private rental may be exactly what they need.
The OBR has forecast a fall in property transactions from about 2018 as a result of this move, which comes on top of the tax changes for buy-to-let announced in July. Short term, we anticipate a spike as those planning on investing in buy-to-let in the next year or so may well bring their purchase forward to beat the April 2016 introduction of this higher rate of Stamp Duty.
