It came as little surprise that Help to Buy, MMR and housing supply were the key topics discussed at this year’s Great Housing Market Debate, held at One Great George Street and sponsored by HSBC.
This year’s debate was a lively one with panellists unafraid to offer opinion, be it popular or otherwise.
Help to Buy
Despite the need for a staggered exit from Help to Buy having been mooted by many industry figures, when asked whether the end of the scheme would need to be gradual, half of the informed audience believed that it would not need to be and that its termination would not have a significant impact on the mortgage market.
Panellist David Newnes, executive director of LSL Property Services said that many consumers who had made enquiries about Help to Buy had, in fact, opted for a mortgage outside of the scheme, having found other deals that were better for them.
Simplify
With regards to any possible misselling of the equity loan element of Help to Buy, audience member and industry expert, Ray Boulger, said the fact Help to Buy is not regulated sets a bad example when it is a government scheme.
He proposed making the terms of the loan simpler, such as having an interest rate of 3 per cent throughout the term, rather than making it RPI (Retail Price Index) plus one, etc, which over complicates matters for consumers when it comes to understanding how the scheme works.
MMR
With the Mortgage Market Review (MMR) knocking on lenders’ doors, the question of its impact on consumers raised.
Panellist Anne Ashworth, property editor at The Times, claimed that some “well-informed” individuals who she had quizzed on MMR were not familiar with it and believes that borrowers are “ill-prepared” for the changes they will experience.
“The administration for mortgage applications is already hugely onerous and borrowers find the questions intrusive”, Anne surmised.
“The last time I applied for a mortgage I was questions such as what I do for lunch. I said I often eat at my desk and I was countered with ‘but you must go out’. If these are the sort of questions that are asked now, who knows what MMR will bring.”
However, Newnes believes that MMR will ultimately benefit borrowers as they will now get the advice they should be getting before being approved for a mortgage.
“It’s important that all aspects of affordability are taken into account, such as ability to repay even if interest rates increase,” he added.
Panellist Nigel Terrington, chief executive of Paragon predicted that there will be a “mortgage drought” for the first few months following from April 26th.
Peter Dockar, head of mortgages at HSBC, was also on the panel and said that MMR is a positive thing and that it will be interesting to see it’s migration to other channels, such as online.
Supply
The hot topic of housing supply was also raised, with David Smith, economics editor of The Sunday Times stating that we have been “unimaginative” in how we think about housing.
“There is money there; housing associations should have more freedom to raise funds for social housing”, said Smith.
Terrington added that no housing minister has stayed in the role for a sufficient about of time to develop a housing plan for the long-term.
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