Help To Buy Loans Pass £20bn

The number of people purchasing a home through the Help to Buy scheme is at an all-time high. The latest Help to Buy statistics show that in the financial year 2020-21 over 55,000 households bought their home with the support of Help to Buy: equity loan – a record year for the scheme. Since the scheme was introduced 328,506 households have now purchased a home through Help to Buy. In total, the value of these equity loans has reached over £20 billion, with the value of the properties sold under the scheme going past the £90 billion mark. Read GovUK website.

https://www.gov.uk/government/news/record-number-of-households-benefit-from-help-to-buy-as-loans-pass-20bn 

Large Housing Association Announces Permanent Move To Homeworking

A housing association that employs 700 people has announced plans to permanently move to a “hybrid working model”. Stonewater said that the organisation, which first transitioned to homeworking in response to the COVID-19 pandemic, will remain predominantly home-based as the country eases out of lockdown, with hubs being set up in Coventry, Reading and Bournemouth. The organisation is also introducing an interest-free loan of up to £10,000 to support colleagues in creating defined workspaces within their homes. Loan repayments will be deducted through a colleague’s monthly salary over three to five years. Read more on Inside Housing.

Inside Housing - News - Large housing association announces permanent move to homeworking 

Council Agree £21m Loan To Firm Which Lost £6m

Norwich city council has agreed to lend its own housing company up to £21m to prevent the firm’s collapse, after bosses insisted “lessons were learned” from the loss of £6m of taxpayers’ money. The city council set up housing firm Norwich Regeneration Ltd in 2015 to create 1,000 homes at Rayne Park, in Bowthorpe. And the authority loaned the business millions of pounds to fund the project’s completion. But it was revealed the company lost £6m after initial homes were sold for less than they cost to build and the council was overcharged according to a leaked report. Read more on the Eastern Daily Press website.

https://www.edp24.co.uk/news/politics/city-council-lend-millions-to-housing-firm-lessons-learned-dave-shaw-1-6694852

Housing Minister: Announcement Soon On Reforms To Help To Buy

The government will make announce reforms to its Help to Buy scheme “quite soon”, the housing minister has said. Speaking at the Conservative Party Conference, Kit Malthouse confirmed speculation that the government plans to adjust the policy. The scheme, under which the government loans money to buyers of new build homes, has come under fire recently and there has been widespread speculation that the government is seeking to change it. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/housing-minister-announcement-soon-on-reforms-to-help-to-buy-58437?utm_source=Housing60&utm_medium=email&utm_content=article_link&utm_campaign=H60

Give Britain’s Young Homebuyers State Loans For Deposits

Young people struggling to buy their first home should be offered loans by the government to help them pay the deposit, according to a new report which warns that reduced home ownership and the recent surge in private renting is damaging family life. The idea has been put forward by the Housing and Finance Institute (HFI). As with the current system of student loans, the HFI suggests the loans could be repaid as a proportion of salary once the recipient has reached a certain income threshold. Alternatively the money could be repaid under a simple repayment arrangement, although at a low interest rate and over a long term. Read more on the Guardian website.

https://www.theguardian.com/society/2018/jul/29/housing-renting-mortgages-loans-home-ownership-first-time-buyers

Government Urged To Postpone ‘Second Mortgage’ Scheme

The government has been urged to stall controversial benefit changes which came into effect in the new tax year, amid claims they unfairly penalise the most vulnerable in society. On 6 April, a “second mortgage” system replaced the Support for Mortgage Interest (SMI), which helped financially constrained homeowners with their mortgage payments. From this month, it will no longer be paid as a free benefit but, instead, the government is offering to loan people the money, which will have to be repaid later with interest. The move attracted anger from a number of recipients of the benefit who said they had not been properly informed of the move. Read more on the Observer website.

https://www.theguardian.com/money/2018/apr/14/support-second-mortgage-interest-benefit-complaints

Investment Fund Launched For Homelessness Sector

Homeless Link, the national membership organisation for homelessness and supported housing agencies, is launching a £4.5m Social Investment Fund for charities and social enterprises across England working to reduce homelessness. The programme is the first of its kind exclusively for the homelessness sector and one of very few sector-specific funds in existence. Homeless Link will invest the money over the next three years, offering homelessness organisations unsecured loans of amounts between £25,000 and £150,000. The aim of the fund is to test and learn where social investment can be most effectively used alongside other forms of funding to improve outcomes. Read more on the Homeless Link website.

£5,000 'Green Tax' Bill To Hit Buy-To-Let Landlords

Hundreds of thousands of buy-to-let homeowners will have to pay  a “green tax” of up to £5,000 to make their properties more energy efficient. Landlords will have to pay upfront for measures such as insulation, cavity wall filling and new boilers from 2018. Until recently they could apply for loans from the Green Deal scheme for improvements, which are then repaid by tenants who benefit from lower bills. But the new Department for Business, Energy and Industrial Strategy is proposing owners provide the money. The move will affect 330,000 buy-to-let landlords who own homes that are less energy efficient, often from the Victorian and Edwardian eras. Read more on the Daily Telegraph website.

Green Deal Energy Loans Had 'Abysmal' Take-Up

The government's energy efficiency loan scheme had an "abysmal" take-up rate because it had not been tested with consumers, MPs have said. The "Green Deal" ended last year after providing just £50m in 14,000 loans to households to boost energy efficiency. That was far less than the £1.1bn predicted by the government, with each loan costing taxpayers £17,000. In a highly critical report, the Public Accounts Committee said projections for the scheme were "wildly optimistic". The MPs said the Department of Energy and Climate Change's figures gave a completely misleading picture of the scheme's prospects to Parliament. Read more on the BBC website.

House Purchase Lending 8% Up On A Year Ago

On an unadjusted basis, in May:

·         Home-owners borrowed £9.4bn for house purchase, up 15% month-on-month and 8% year-on-year. They took out 53,800 loans, up 13% on April and 5% on May 2015.

·         First-time buyers borrowed £4.3bn, up 10% on April and 23% on May last year. This equated to 27,500 loans, up 9% month-on-month and 16% year-on-year. 

·         Home movers borrowed £5.1bn, up 19% on April but down 2% compared to a year ago. This represented 26,300 loans, up 18% month-on-month but down 5% on May 2015.

·         Remortgage activity totalled £5.2bn, down 15% on April but up 30% compared to a year ago. This came to 30,900 loans, down 12% month-on-month but up 25% compared to a year ago.

·         Landlords borrowed £2.6bn, up 4% month-on-month but down 4% year-on-year. This came to 16,600 loans in total, up 3% compared to April but down 8% compared to May 2015.

Read more on the Council of Mortgage Lenders website.

Home-Owner House Purchase Lending Down In April

·         Home-owners borrowed £8.1bn for house purchase, down 40% month-on-month and 4% year-on-year. They took out 47,300 loans, down 31% on March and 5% on April 2015.

·         First-time buyers borrowed £3.9bn, down 11% on March but up 15% on April last year. This equated to 25,100 loans, down 9% month-on-month but up 7% year-on-year. 

·         Home movers borrowed £4.3bn, down 53% on March and 14% compared to a year ago. This represented 22,200 loans, down 46% month-on-month and 15% on April 2015.

·         Landlords borrowed £2.5bn, down 65% month-on-month and 7% year-on-year. This came to 16,100 loans in total, down 64% compared to March and down 10% compared to April 2015.

Read more on the Council of Mortgage Lenders website.

Bank Lending To Property Developers Halves In Just Two Years To £16bn

Bank lending to property developers has halved over the last two years, making it more difficult for companies to kick-start schemes that could help ease the housing crisis. Bank finance has dropped from £34bn in January 2014 to just £16bn the same month this year – with bridging finance or auction finance particularly hard to come by. These are usually short term loans used to take ownership of a property before obtaining a traditional term loan or mortgage. However, without access to this type of finance developers cannot take projects beyond the planning stage. Banks are happy to offer long term mortgages and term loans secured on property but see the short-term loans as too risky. As a result alternative lenders, who can make quicker decisions and have different lending criteria to banks, are stepping into the lending gap. Read more on the City AM website.

Landlords Are Using Companies To Dodge The Stamp Duty

Buy-to-let mortgage lending is booming ahead of the Chancellor’s tax hike – with a soaring number of landlords reportedly using companies to flout the crackdown. Landlord loans rocketed by 22 per cent in January compared with the same month in 2015, as buyers rush to beat the forthcoming tax changes. From April 1, buyers of second homes will pay 3 per cent additional stamp duty on property purchases. As the proposals stand, individuals who hold more than 15 properties may not have to pay the tax - and companies holding at least that number will be exempt from stamp duty when they buy more. Some specialist landlord firms are now reporting as many as 50 per cent of all sales being made through corporations - a move that could prove to be more beneficial for tax on rental income. Read more on the Daily Mail website.

Kerslake To Table Right To Buy Loans Amendment

The government will be pressed to offer loans for the extended Right to Buy instead of discounts, in a proposed change to legislation. Lord Bob Kerslake said he would table an amendment to the Housing and Planning Bill so that association tenants are offered equity loans, as opposed to discounts.  A report published by the Communities and Local Government committee earlier this month said the discounts should not be paid through local authority property sales, calling the funding model “extremely questionable”. Read more on Inside Housing.

Cameron’s £140m To Tear Down Sink Estates Is A Loan

David Cameron’s promise to spend millions on bulldozing and rebuilding sink estates as a key part of his prime ministerial legacy appeared to be unravelling as it emerged that the small amount of money set aside for the project can only be accessed by private developers in the form of loans. The prime minister announced his intention in January to potentially tear down 100 of the UK’s worst estates to tackle drug abuse and gang culture. The modest size of the £140m “fund” set aside by Cameron to meet costs was widely questioned at the time, but Downing Street insisted that the redevelopment programme would reverse decades of neglect. Now the Observer has learned that the £140m is only available in loan form to private sector organisations who come forward to regenerate stricken areas. A statement quietly released by the CLG in February admitted: “£140m of loan funding has been set aside by government, to be used as a springboard for partnership and joint venture arrangements, with the active involvement of communities.” Read more on the Observer website.

Regulatory Changes Slowing Buy-To-Let Growth

Paragon Group of Companies said recent fiscal and regulatory changes and proposals may soften the rate of growth for buy-to-let as time progresses, but demand for rental properties would remain strong. Britain will raise the level of property tax for those who buy a house in order to rent it and on second homes, finance minister George Osborne said in November, as part of plans to cut government spending and raise revenues. Additionally, banks across the world would have to set aside more capital to cover buy-to-let mortgages and place greater emphasis on a borrower's ability to repay a home loan, under draft rules from global banking regulators. However, to date, there has been no change in existing buy-to-let customer behaviour, Paragon said. Read more on the Daily Mail website.

London Help-To-Buy Scheme To Launch In February

A government scheme offering homebuyers in London loans of up to £240,000 to help them buy new-build properties will go live on 1 February. Help to buy London is an extension of the equity loan scheme that has been available to buyers around the country since April 2013, which doubles the amount of money being offered from 20% of a property’s purchase price to 40%. While mortgage rates are still at record lows and lenders are increasingly willing to offer loans to first-time buyers, high house prices in the capital have locked many out of the market. To meet affordability checks and qualify for mortgages, borrowers have had to raise increasingly large deposits. Read more on the Guardian website.

Reclassification 'Could Lead To Repricing'

Lenders could push for a repricing of historic loans after the reclassification of housing associations as public bodies, a consultancy has warned. Property consultancy Savills said the Office for National Statistics’ (ONS) decision to bring housing associations onto the national balance sheet last week could constitute “a material change in the market”. This could give lenders an opening to push for a repricing of loss-making, long-term loans signed before the recession, it warned. A briefing note produced after the ONS decision on Friday also warned landlords would likely face controls on new debt from the 2016 Budget onwards. Read more on the Savills website.

MOD Has Loaned £75.7 Million Through The Forces Help To Buy Scheme

Thousands of troops and their families have bought their own home through the Forces Help to Buy scheme, which launched in April 2014, according to latest government figures. The £200 million scheme, which allows military personnel to borrow a deposit of up to half of their annual salary towards buying a home, is now half-way through its three-year trial. The MOD has loaned £75.7 million to around 5,000 applicants within the last 18 months. And a further 1,900 personnel have had their applications approved and are awaiting completion of property purchases. Read more on the Housing Excellence website.

Mortgage Lending To Landlords Soared In Last Quarter Of 2014

Lending for buy-to-let soared by 26% during the last three months of 2014, far outstripping the growth in lending to first-time buyers, according to figures from the Council of Mortgage Lenders. Banks and building societies handed loans worth £7.7bn to landlords in the fourth quarter of 2014, up 32% on the same period a year earlier. Meanwhile lending to first-time buyers was £11.6bn, down 2% on the previous quarter but up 5% over the year. The number of loans for buy-to-let across the whole of 2014 totalled 197,700, up 23% compared to 2013. Read more on the Guardian website.