Government schemes improve prospects for first-time buyers
The Building Societies Association published the Q1 results of its quarterly consumer survey, Property Tracker, which reveals that government schemes are well-received by aspiring homeowners.
Government schemes are generally well-received by those aiming to get onto the housing ladder, the BSA’s March Property Tracker shows, with 45% of aspiring buyers saying that these schemes have made it easier for them to raise a deposit. A further 28% of people who aspire to buy say that the schemes have made no difference to them and a smaller group, 8%, say the schemes have actually made it harder for them to raise a deposit.
This quarterly consumer survey shows that those who aspire to buy with a mortgage are most commonly aiming for a 10% deposit (25%). A slightly smaller group (22%) are aiming to save over 25% of the cost of their first home. A quarter of people think that they will raise their required deposit within a year, three-quarters within 5 years.
While Government schemes are being viewed on balance positively with only 8% of people unaware of them, their existence highlights that there is still a significant lack of new house building. Government schemes are helping to fuel buyer demand and aid the financial ability to buy, but do not address the underlying chronic lack of affordable homes, which is acute in some areas like London. Commenting on the results, BSA Head of Mortgage Policy, Paul Broadhead, said:
“A significant proportion of aspiring homebuyers say that Government schemes have helped them to raise the required deposit to get on the housing ladder, which is good news.
However, these are clearly demand side interventions that address the symptoms and not the root cause of the problems in the housing market: the fact that affordability is becoming stretched across all tenures; and the failure of successive Governments to build or facilitate the building of sufficient homes of the right type, across mixed tenures in the right places.
Help to Buy mortgage guarantee, which is arguably the Government’s most successful and high profile scheme, comes to an end at the end of this year. Some lenders, including many building societies, were active in the high loan-to-value (LTV) market before the scheme, and will likely remain so when the scheme ends. It is vital that the Government clearly articulates its strategy to maintain consumer confidence and avoid a squeeze in the number of mortgages available at high LTVs once it is gone.”
