I attended a very interesting First Time Buyer seminar at the Council of Mortgage Lenders yesterday.
There was universal acceptance that something has to be done to support the first time buyer. And yet, when the discussion moved on to the type of innovations that are being considered, there seemed little that was innovative in the mortgage arena. Some hope was raised by the discussion about Mortgage Indemnity Insurance – in fact I just received a press release from the Scottish Government giving the green light and budget to develop the idea – and it will probably impact on the rest of the UK too.
Under private sector innovations/ alternative solutions, Mill Group’s Co-investment was listed alongside Castle Trust, Asset Trust and guarantor mortgages. The major lenders have tried to come up with ideas – such as Lloyds’ Lend a Hand, NatWest’s First Home Saver and Nationwide’s Save to Buy – but they tend to move the burden from the FTB to parents. With 77% of FTB’s aged under 30 needing help, can they all rely on rich parents? Barratts believes otherwise too, as they (and others) try new ideas on their new build developments with shared equity and deposit support schemes.
We ourselves have also been talking to Local Authorities about Co-investment as they aim to improve the housing situation in their areas and maintain balanced communities – and are finding a genuine interest and openness to innovation.
With LTV mortgages a long way off due to the plethora of regulation that is affecting the scope of the mortgage market, my continued view is that waiting for a solution from mortgage lenders is simply not enough.