Adrian MacDiarmid – Barratt Developments
The Help to Buy scheme has helped hundreds of thousands of first-time buyers take their first step on the property ladder. Adrian MacDiarmid, Head of Mortgage Lender Relations at Barratt Developments, looks at the role housing developers and specialist lenders can play in ensuring aspiring homeowners continue to benefit from the scheme before it ends in 2023.
The housing market has made a very strong start to 2020. So far this year we have already had HMRC reporting that the number of residential property sales increased by 5.2% year-on-year in January1, as well as the Land Registry saying that house prices have increased in every region in the UK2.
Here at Barratt Developments we’ve continued with our commitment to not just building more of the homes that the country so desperately needs, but also ensuring we continue to invest in quality and service, putting our customers at the heart of everything we do.
2019 was an excellent year for us. I’m proud to report that we posted our highest figures for half-year completions in 12 years thanks to a strong first-half performance which saw us complete 8,314 properties – a year-on-year increase of 9.1%3. We were also awarded five stars in the Home Builders Federation Survey for the 10th year in a row – an outstanding achievement and a record that we are very proud of.
It means we’ve now built more than 450,000 high quality new homes since we started in 1958, and have increased the number of homes we build by 60% since 2011.
Part of this success can be attributed to the Help to Buy Equity Loan scheme and the support of an increasingly competitive mortgage market.
Help to Buy was established to allow customers to buy a new home with just a 5% deposit and to give developers enough confidence in the market to invest in new land opportunities. It has been highly successful in delivering this, and in doing so has not only increased the supply of housing, but has also contributed to economic growth and employment opportunities.
Since its launch, more than 236,000 properties have been bought with an equity loan4, 81% of them by first time buyers. The mean purchase price of a property bought was just over £262,000, with buyers, 72% of who have a household income of £60,000 less, using a mean equity loan of £56,951.
With the scheme scheduled to come to an end for first-time buyers in 2023, and only one of the top five lenders offering 95% loans on new build homes, we will continue to work very closely with our lending partners to ensure that home ownership remains an accessible aspiration for as many people as possible.
Precise Mortgages’ criteria is designed to help customers realise their home owning dream, even if they’ve been turned down by a high street lender. They’ll consider customers with less than perfect credit histories, including CCJs, defaults, DMPs and unsecured/secured arrears, as well as self-employed customers with one year’s figures. They have also extended their Help to Buy range to first-time buyers in Scotland and now offer remortgages for properties originally purchased under the scheme to help first-time buyers become established homeowners.
We believe specialist lenders, such as Precise Mortgages, have played an important part in helping people take their first step on the property ladder, allowing us to sell to customers who are not well served by the mainstream market and working with us to innovate in order to open up the market to different customer sectors.