With the Council of Mortgage Lenders (CML) reporting yet another increase in gross mortgage lending across the UK, homebuyers are becoming increasingly confident in government schemes such as Help to Buy, with one in five first time buyers claiming to be optimistic about their prospects since the initiative was launched during the Budget earlier this year, according to the BSA (Building Societies Association.)
With the Funding for Lending scheme (FLS) marking its first birthday this month, mortgage broker Springtide Capital looks back on the effects of the initiative as a ‘triumph for boosting housing market recovery’ with a reported increase of first time buyers and lowest ever mortgage rates on the market since the financial crisis.
Managing Director Henry Knight says:
‘Lenders that have opted in to the government’s proposed Help to Buy II scheme (set to launch in January 2014) are investing a lot of time into developing innovative products to meet the relevant criteria, however, with the success of other initiatives such as Funding for Lending and Help to Buy I, one begins to question the relevance of a scheme such as Help to Buy II.”
‘The mortgage industry has worked hard to pull itself out of recessionary conditions, therefore the question remains as to whether it is truly responsible to endorse further lending at 90-95%pc LTV. Whilst it is encouraging to see so many first time buyers being able to take their first step on to the property ladder, our concern is that going too far with the highest LTV brackets could end up causing us unwanted problems further down the road.’