Housebuilders are calling on the government to push back the deadline for help-to-buy in the wake of the Covid-19 lockdown.
They said while the chancellor Rishi Sunak´s changes in stamp duty would help the market in the short-term a key stimulus to get things going would be ease of getting a loan.
Redrow chief executive Matthew Pratt told Construction Index: “Despite the home building industry coming to a standstill for the best part of the last three months, the help-to-buy clock has kept ticking towards the deadline.
“Thousands of potential homeowners across the country will now lose out through no fault of their own and that can’t be right.”
KPMGUK head of infrastructure, building and constructionJan Crosby said the housing market had already picked up since May 13 when sales were allowed again due to pent up demand.
“The stamp duty cut may therefore not have been needed. More important is providing longer-term clarity on help-to-buy, unlocking funding for SME housebuilders to play their part and accelerating the provision of affordably priced key worker family accommodation across the country.”
Rising unemployment will see LTVs reduce
Finance experts have said while raising the stamp duty threshold to £500,000 looks good in theory potential homeowners could struggle toget loans. It´s expected lenders will want higher deposits to protect themselves against falling values with unemployment set to rise.
The ministry of housing, communities and local government said it was too early to comment on whether the current help-to-buy loan scheme could be extended.
Brokers Hank Zarihs Associates said the help to buy equity loans had proved instrumental in creating demand for new properties and an extension was something property development lenders wanted.
The current scheme is set to finish at the end of March 2023 with a more targeted initiative slated for April 2021. The new scheme will be restricted to first-time buyers and will include regional property price caps. Under help-to-buy the government lends buyers 20 per cent for properties in England and up to 40 per cent of the cost of new build homes in greater London up to the value of £600,000.