Larger lenders called on to support ‘fourth housing tenure’


More lenders – especially larger ones – must step up to back what the Government is calling the ‘fourth housing tenure’

With just days to go until Chancellor Philip Hammond delivers his first Autumn Statement, all parts of the UK economy are keen to see what he has in store.

We are told the Government’s white paper on housing will be published at around the same time, setting out its stall for tackling the acute crisis facing the country.

In a recent Ipsos Mori poll on Britain’s infrastructure, six in 10 people said the new-housing supply was inadequate. Many positive noises have already been made by ministers, so we are hopeful the white paper will provide cross-stakeholder support and cohesion for the various tenures needed if the Government is to succeed.

Help to Buy

As part of the diversity of tenure favoured by the Government, Help to Buy Shared Ownership takes another big step forward next month. The Homes & Communities Agency and the Greater London Authority will announce the initial bids for the huge £4.7bn capital grant available for providers in England to build the required 135,000 shared ownership properties targeted by 2021.

When we consider that this figure is 40,000 higher than currently completed under Help to Buy Equity Share (which has been in play since 2013), we can see how significant such an injection is.

However, it begs the question about more diverse lender support. The number of lenders currently in this sector is relatively small, as is their size. Larger players need to step up and support what the Government is calling the ‘fourth housing tenure’.

Those supporting the Help to Buy Equity Loan sector have seen some robust lending over the past three years, and most fully understand how different the pressures of new-build can be from their normal mainstream purchase business. But many now need to consider more options for customers seeking to remortgage, whether for the full amount of mortgage and HCA charge or simply a staircasing of the HCA loan. If customers are able to do so only with their existing lender, they may be termed ‘mortgage prisoners’ in this market.


Overall, confidence in the new-build sector remains strong.

Encouragingly, the recently published annual report on housebuilders from Lloyds Bank Commercial Banking found that, despite challenges such as the current planning system, a skills shortage and uncertainty following the EU referendum, increased growth and investment in the sector was forecast.

Around 42 per cent of housebuilders said they had been confident about their growth forecasts since the EU vote, compared with 27 per cent who said they had declined. Housebuilders now predict an average growth of 28 per cent over the next five years, up from 25 per cent last year.

This is just the news we need as we enter the winter quarter and gear up for another productive year in new-build.

James Chidgey is new homes relationship manager at Mortgage Advice Bureau