Local councils to offer first-time buyer mortgage support

Fifteen local authorities team up with Lloyds TSB in a scheme to top-up first-time buyers’ deposits

First-time buyers who are unable to call on the bank of mum and dad to boost their deposit may now be able to turn to their local council instead.

Fifteen local authorities, including East Lothian, Blackpool, Newcastle-under-Lyme and Warrington, have agreed to put money in a Lloyds TSB scheme to top up the deposits of first-time buyers trying to buy a home in their area. The scheme, called Local Lend a Hand, allows first-timers to buy a home with a deposit of as little as 5%.

Raising a deposit is one of the biggest hurdles for first-time buyers since the 2007 banking crisis, with many lenders refusing mortgages to those whose savings are less than 20% of the value of the property they want to buy, and offering the lowest rates to those with deposits of 25% or more. The requirement for a big deposit has relaxed recently with more lenders willing to provide mortgages worth 90% of a property’s value, but only two – Yorkshire Bank and Skipton building society, via its estate agency subsidiary Connells – will lend up to 95%.

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Economy needs housebuilding budget boost

Tackling housing crisis would create 200,000 jobs

HBF: Urgent measures to dramatically increase housing supply and address the growing housing crisis must be included in next week’s budget. Providing desperately needed homes would create 200,000 direct jobs over the next year and stimulate growth giving the country a massive economic boost.

A year into office the Government is facing a huge housing dilemma. House building is at an all time low; planning permissions are continuing to decline; the number of first time buyers has collapsed; millions of families are languishing on Local Authority waiting lists; and there is an ongoing hiatus being caused by the Coalition’s radically different planning system that is still being formulated, with Local Authorities struggling to get to grips with the new incentive based proposals.

Housing projectMeanwhile, economic growth is crucial to the wider economy over the next few years. According to Government figures, even in its current crisis state, housing supply accounts for around 3% of UK GDP and provides between 1 and 1.25 million jobs in the UK.

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House prices fall for the eighth consecutive month

Experts predict prices will continue to fall as fewer people are getting loans and many are falling behind repayments

The average price of a UK home fell by 1.4% in January to £208,552 according to the Department for Communities and Local Government (DCLG).

The annual rate of house price inflation dipped to 0.5% in January, compared to 3.8% in December and a peak of 10.6% in May 2010, according to the DCLG house price index. It was the eighth consecutive month during which the annual rate of house price inflation has fallen.

Negative housing market data was also announced by the Financial Services Authority (FSA), which showed new loans to borrowers reached £37bn in the fourth quarter of 2010 – a drop of 10% compared to the previous quarter and an 11% fall compared to the final quarter of 2009.

The FSA said the number of new arrears cases increased in the final three months of last year to 38,800 – 6% higher than the previous quarter but still 5% below the 40,900 cases in the fourth quarter of 2009 . The total number of accounts in arrears at the end of 2010 was 343,400, unchanged from last quarter.

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House prices fall 2.8% year-on-year

Halifax house prices index shows decreases in yearly, quarterly and monthly measures giving an average house price of £162,657

House prices fell by 2.8% over the the year to February, according to the Halifax – the biggest annual fall since October 2009.

The bank reported a monthly change of -0.9% in house prices and a quarterly change – lenders’ preferred measure – of -0.4%, leaving the average house price at £162,657.

But Martin Ellis, housing economist for the Halifax, downplayed the falls saying there had been little change in house prices over the first two months of 2011, with this month’s 0.9% fall offset by January’s 0.8% gain.

“Overall, we expect a modest 2% decrease in house prices in 2011. Uncertainty over the economic outlook is likely to weigh down on housing demand this year,” he said.

“Fewer properties have been coming on to the market in recent months. This trend, if sustained, should improve the balance between demand and supply and help to prevent a more significant fall in house prices.”

The ratio of average house price to national average earnings for a male working on a full-time basis is also at its lowest point for a year, standing at 4.46 compare to 4.63 in February 2010.

Earlier this week, Robert Gardner, chief economist for Nationwide building society, said the low number of first-time buyers was “casting a shadow” over the housing market.

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Self build structural warranty provider welcomes Government’s self-build sector boost

Structural warranty provider Build-Zone today welcomed the Government’s recent policy announcement to cut red tape and boost demand in the UK self-build sector.

Structural Warranty Insurance

Housing Minister Grant Shapps called on the country’s aspiring self-builders to make a housebuilding revolution their New Year’s resolution.  Self-builders are already Britain’s largest housebuilder, and account for one-fifth of Britain’s new homes each year, but for far too long the aspirations of ordinary people to build their own home have been thwarted by barriers and red tape.  Barriers that stand in people’s way will be torn down – including a complex and bureaucratic planning system, regulatory burdens, and lack of access to land and finance.

A new Community Right to Build will offer communities the chance to give the green light to new developments without the need for specific planning applications.  This could be local people working alone to build their own homes, or entire communities coming together to build the homes the area needs.

The self-build sector is already important to growth and housing supply – with self-builders completing as many as 10,000 building projects each year – so making it easier for more people to build their own home will provide a welcome boost to the housing market.

Mr Shapps has asked the National Self Build Association (NASBA) to work with his officials to develop an action plan to boost the number of self-builders across the country – and address the common barriers aspiring self-builders face, including:

  • availability of land – including making public sector land available for house building
  • availability of finance – working with lenders to ensure self-building communities can get the finance they need
  • availability of expert support – how self-builders can support communities looking to build the homes they need, and how those new to self-building can be supported.

Build-Zone are a major provider of 10 year structural warranty, technical audits, and building control services, to the self build marketplace.

Build-Zone Director Simon Middleton said:

“This is really is a positive step forward for anyone who has dreamed of building their own home but have had their hopes dashed through a complex planning system and lack of land in their community.  Build-Zone has been providing Structural Warranties to this [Self-build] market sector since 2003 and we already have the products in place to provide essential cover on community projects as well.

Our sister operation Self Build Zone is the market leader in the provision of Self-build insurance and is also in the perfect position to provide communities looking to build homes with specific site cover as well. Insuring the project properly is of fundamental importance when there are many people’s financial interests at stake”.

Self-Build Zone products include:

Site Insurance
Buildings Insurance
Structural Warranty
Building Control Services
Renovation Insurance
Code for Sustainable Homes
SAP Energy Ratings
Air Pressure Testing
Sound Testing

Self Build Zone Director, Simon Middleton will be guest speaking at the Lending Policy Meets Housebuilding Reality Conference where  he will deliver a warranty providers view of Modern Methods of Construction and Eco Building.

The website can be found at www.buildzone.com

Or subscribe to the structural warranty blog: www.structural-warranty-blog.co.uk

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