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Will Help to Buy 2 deliver the goods?


The success of the Help to Buy equity scheme has brought good news for the new build housing market in 2013.

Figures out last month suggested that since its launch in April there have been 10,000 reservations for new homes, providing house builders with the confidence they need to press ahead with new developments.

What is particularly encouraging is more lenders are now joining the scheme, with Santander, Leeds Building Society and Mansfield Building Society all having signed up in recent weeks.

Furthermore, I see the prospects for the second half of the year continuing to be good, with more looking to participate, so there could be around a dozen or more lenders in place by the end of the year.

Providing brokers and their clients with a greater range of options has been instrumental in helping generate healthy competition in the market.

This is therefore an area in which advisers can no longer afford to ignore.

The challenge is to replicate the successes for the Help to Buy mortgage guarantee scheme which is being launched in 2014.

Right now, however, the jury is out as to whether this second programme will achieve its objectives as the government is yet to announce how much it will cost lenders to join.

Given the lack of clarity here, it’s not surprising some commentators are questioning how things will pan out. Lenders take considerable risks, so they need to be shown that the scheme will be profitable for them. If the pricing is correct, however, the second programme could be every bit as successful as the first.


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