View more on these topics

Being Frank: No let-up for new-build


Whatever the long post-Brexit summer brings, we need to maintain the strong momentum developed since 2013

As our attention turns to summer holidays, the new-build market can reflect on how it may be affected by the UK’s decision to leave the EU.

While in the long term there may be growth opportunities for the economy, in the short term housebuilders are keen to ensure buyer confidence is not dented by the gloomy headlines and political upheaval. Some will be reviewing their build plans over the coming weeks. As with severe winter weather, market turbulence is not good for the construction and sale of new homes.

It is a welcome relief to have a new government in place so that the market is not left to breed more uncertainty in a political vacuum until September, as originally envisaged following David Cameron’s resignation.

However, new Prime Minister Theresa May’s government shake-up means a change of faces in the housing ministry, which now includes Sajid Javid as new secretary of state for communities and local government, the department that directs housing and planning matters. New housing minister Gavin Barwell represents Croydon, part of high-rise urban London, so he knows all about the acute need for more new and affordable homes.

Commentators have not been slow to remark on the potential downturn in the economy and the effect this may have on buyer demand. But while a lot of talk has centred on the London impact, the overall situation in England, Wales and Scotland is less clear and is unlikely to be so until September data is in, given the usual lull during the summer months.

That said, housebuilders have been quick off the blocks and have already met with the new government team to confirm assurances given by its predecessor and ask for more stimuli to maintain current levels of construction.

The key plank of government support, the Help to Buy equity loan scheme, continues to attract buyers at a rate of almost 3,000 a month.

Since its launch in April 2013, the scheme has assisted in the sale of 81,000 newly built homes in England alone. Scotland and Wales have similar schemes, and more recently England’s was boosted by a specific London scheme, giving an equity loan of up to 40 per cent.

Housebuilders are assured these innovative schemes are set to continue.

Support for high-LTV lending is of continuing concern in a market where deposits are hard to raise and prices are out of sync with incomes. Exploring options to extend the Help to Buy mortgage guarantee scheme, due to close in December, would assist new-build, giving choice to the customer and stability to our market.

Housebuilder chiefs have also been vocal in their requests to drive the housing market forward, with one advocating the expansion in England of the 40 per cent Help to Buy London scheme on a temporary basis.

More requests that we support relate to stamp duty, particularly for first-time buyers. Average purchase values under the Help to Buy equity loan scheme are around £212,000, incurring an average SDLT of £1,750. This is paid on the purchase price, despite the fact the Government holds up to 20 per cent of equity at completion.

Whatever the long post-Brexit summer brings, we need to maintain the strong momentum developed since 2013. We will continue to support the Home Builders Federation and its members in identifying trends and factors that may be working against the market.

Andy Frankish is new homes director at Mortgage Advice Bureau



HSBC adds Sesame, MAB, Stonebridge and Mortgage Intelligence

HSBC is adding Sesame Limited, Mortgage Advice Bureau, Stonebridge Group and Mortgage Intelligence to its broker panel. The firms can access all HSBC’s full range of residential mortgages. The brokers have full online access to HSBC products, can submit and track applications and have direct access to the underwriting team. HSBC UK head of mortgages […]

Yorkshire Building Society first half lending falls 17%

Yorkshire Building Society has reported a 17 per cent decline in net lending during the first half of the year at £521m down from £630m over the same period in 2015. The mutual posted pre-tax profits of £99.9m for the first half, down 10 per cent from £111.2m over the same period last year. Mortgage balances […]

FCA logo new 3 620x430

Treasury committee calls for break-up of ‘overloaded’ FCA

MPs in the influential Treasury committee are calling for the Financial Conduct Authority to separate out its enforcement division following a damning report in the collapse of HBOS. In a report published yesterday, the committee said an “independent enforcement function” should sit between the FCA and PRA. It says the current system – where one […]


News and expert analysis straight to your inbox

Sign up