Alongside this, the number of people buying houses with low-value deposits (15 per cent or less of the property’s value) has risen by 7.3 per cent in the past year. This is not to say that there is a risk that smaller deposits may precipitate another financial crisis, as the proportion of high LTV mortgages is still only a quarter of what it was in 2007 and is not a symptom of any malady in the mortgage market.
However, the figures show that people are still willing to borrow proportionally large sums for homes, and that demand is there, even if it has been tempered by the introduction of MMR last year. This rising demand demonstrates the pressing need for the Government to deliver on its plans to build 200,000 homes a year.
The Building Societies Association (BSA) has called on the new Government to deliver a long-term strategy to counter the problems of housing supply constraints. This includes issues in the market that are more likely to affect smaller developers who may be working to tight schedules. There are several issues that add additional hassle for developers, and brokers and conveyancers recently condemned delays of up to six months to register a property’s title at the Land Registry.
Figures obtained from the Land Registry show the current average completion time for all new title work is 40 working days. To put that in context, during the first three months of 2015 the average completion time for bridging lending was around 34 days.
For property developers taking short-term bridging loans, where buyers might take a loan for four months intending to sell at that point to repay their loan, a six month delay to register the title in their name could pose serious and costly problems.
Any proposed changes to the UK’s housing policy must be wide-ranging and take into account the whole market rather than simply focusing on the number of houses built, looking at all stages of the development process. Issues such as planning permission or skills shortages receive a fair amount of attention, but smaller issues such as registry times, while often overlooked, can make a huge difference to the overall success of a project.
Aldermore celebrated its sixth anniversary last month. Since our launch in 2009 at a time when the financial crisis was causing major upheaval in the industry, the housing market has seen a remarkable recovery. Nevertheless, there is still more that can be done to ensure that the sector is working effectively for both developers and customers.
Attributed to Charles Haresnape, Managing Director, Mortgages & Commercial Lending, Aldermore
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