NEW HOMEBUY MEASURES LEAVE HOUSEBUILDERS FRUSTRATED

NEW HOMEBUY MEASURES LEAVE HOUSEBUILDERS FRUSTRATED



798_2022-05-03-11-01-31am.gif
.

 

Mike Ratcliffe, chief executive of Wolsey Securities, leading independent finance specialist for housebuilders, explains why the new Government affordable housing scheme is too little too late:
 
“Now the initial hype over the Government’s new housing measures has died away we are beginning to get a clearer picture of the true benefits of the initiatives put in place to stimulate the market.
 
“The HomeBuy Direct initiative, like those gone before it, is unlikely to seriously tackle the severity of the problem facing first time buyers and housebuilders or make a real difference to consumer confidence. It is very frustrating that the Government is seemingly unable to grasp the sheer size of the problems facing the housing market. HomeBuy Direct is only designed to help up to 10,000 first time buyers, a drop in the ocean compared to the fall in the level of transactions already seen this year. 
 
“Only twelve months ago, the Prime Minister proclaimed that housebuilding is a vital cornerstone of the UK economy. A year on and the housebuilding sector has ground to a virtual halt and finds itself in a desperate state. The survival of housebuilders relies on sales increasing now, not in early 2009 when the HomeBuy Direct scheme is expected to be available to purchasers – which could be too little too late for many developers.
 
“The scheme also requires equal equity input from participating developers, and while such funding and stakeholder ownership may be able to be accommodated by the bigger players, it will leave the many thousand smaller housebuilders out in the cold. 
 
 
“Any benefit from the decision to create a stamp duty ‘holiday’ by raising the level to £175,000 for twelve months, has already been effectively lost through the virtual standstill in reservations that resulted from the leaked news that the Chancellor was considering the move.  While it is welcomed, there is no doubt that the industry considers the scale of solution falls well short of the scale of the problem.  In fact, it entirely misses it.
 
“The Government seems unable to grasp the fundamental point that the engine room of the housing market is reliant upon a reliable supply of credit – i.e. the mortgage market.  The focus of the Chancellors efforts should be simple: get banks lending again.  While Government attempts to tinker around the edges, the industry is having the heart ripped out of it.”

Leave a comment