Britain’s new build market needs to confront its dependency on the Help to Buy equity loan scheme, according to the Intermediary Mortgage Lenders Association. The Help to Buy scheme has so far made up 27% of all new housing completions and 5% of all housing transactions from April 2013 to March 2017, with equity loans backed by an estimated £21bn of government funding. Furthermore, the ten largest housebuilders attribute around 35-40% of their sales to Help to Buy.
85% of properties sold for less than the asking price in November, the highest seen since records began in 2013, the latest NAEA data shows. This is up from 78% in October, and just higher than last November when 84% of properties sold for less than asking price.
Online research from Equifax reveals that 39% of Brits expect Brexit to negatively affect how they access and manage their finances. The survey, conducted by YouGov, also highlighted the younger generations’ pessimism about Brexit with over half (56%) of 18-24 year olds believing exiting the EU will make it more difficult to access and manage their finances, compared to 30% of those 55 and over.
Of all the ‘Help to Buy hotspots’ – the 51 local authorities where 100 or more Help to Buy equity loans have been completed each year since the scheme was introduced – borrowers in Greenwich have seen the value of their home rise the most since 2013 relative to the original equity loan amount borrowed. Original adopters of the scheme will start to incur interest on their loans next year and borrowers must repay 20% of the property value at the time of selling (rather than the original loan). Research shows that average first-time buyer house prices in Greenwich have risen from £221,852 to £357,710 since April 2013, a 61% increase.
UK annual consumer price index (CPI) inflation rose to 3.1% in November - its highest rate since March 2012 and, more significantly, breaching the Bank of England’s upper target of 3%. The latest figures were higher than consensus expectations of 3%, with higher food and energy price inflation causing the upside surprise.