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Lack of ‘concerted energy’ to address UK housing crisis: Lenders Live

The UK has got all the tools to address the housing crisis from government investment to ready and waiting developers but Brightstar Financial & Sirius Property Finance group chief operations officer William Lloyd-Hayward says there is a lack of “genuine, concise and focused energy to drive and deliver it”.

The comments were made after the National House-Building Council (NHBC) reported last week that there was a significant increase in the number of new home registrations.

New home completions came in at 40,289 in the second quarter of the year, up 16% from the same period a year ago, returning housebuilding to pre-pandemic levels.

It also revealed that the quarter also saw a rise in the number of new home registrations – the process by which housebuilders register plots they intend to build with the body – to 66,855, up by 45%.

Speaking on this week’s Lenders Live on LinkedIn hosted by Knowledge Bank chief executive Nicola Firth, Lloyd-Hayward explains that all of the latest stats are great but “we’ve got some simple levers that can be bought to really sort out the housing crisis”.

“This isn’t a crisis of the last few years, we’ve had 12 housing ministers in 12 years, and probably 20 and 15 years. We’ve never had concerted energy behind this in this country for more than two decades.”

“Every single one of us can help play that role, but we just need some really consecutive energy behind it to get this thing going. Hopefully, those signs and registrations, turn out to be 6,000 new homes built in the next year – it will be great.”

When the data was released, NHBC chief executive Steve Wood said: “At this stage, we are not seeing evidence that the cost-of-living crisis or risks of recession are affecting consumer demand, while registration levels reinforce continued confidence within the sector.”

Responding to the chief executive’s comment, Lloyd-Hayward says: “I think this is a general point. We’re in the moment where everyone is anticipating and preparing a lot, some people have obviously been affected, but the storm is larger and brewing ahead.”

Speaking from a lender’s perspective, HSBC senior corporate account manager Tracie Burton comments: “I was quite surprised by this, but I do think it’s really encouraging.”

“We still really need to do more in the new build space, especially get more creative with modern homes and think about the future generations as well so that we can meet that demand. However, as Lloyd-Hayward said there are some levers we can pull that will fix that problem,” Burton adds. 

Staying on the same theme, the panel also discussed the latest figures from the government’s 95% loan to value (LTV) scheme.

As of the end of March 7,966 mortgages had been completed through the scheme. 

It showed an increase compared to the period ending in December 2021 when there were 12,388 mortgage completions through the scheme.

The latest statistics show that completions from the scheme launch on 19 April to the end of March this year represented 6.5% of all residential mortgage completions in the UK.

But is the scheme enough on its own or will lenders need to gain confidence in the high LTV space to make a difference? 

HSBC’s Burton suggests that lenders will do more, “they will get that confidence that they need in order to support this part of the sector but that will work alongside the government”. 

“As our risk teams have their discussions and talks, we will get confidence to go further into that larger LTV space.”

Meanwhile, Harpenden Building Society head of intermediary sales and distribution Emily Smith says: “Prior to the pandemic, there was a lot of 95% mortgages and there was a lot of lenders involved. Lender’s competence was really high when it came to high LTV lending but then the pandemic hit and a lot of lenders became more cautious, and rightly so.”

Smith suggests “it’s a tricky one” because “lenders don’t always like to be the first one to say, ‘we’re doing this’, but it probably needs to be the larger lenders who offer higher LTV lending rather than the smaller lenders”.

Burton adds: “We can’t consider these things in silos, there’s a lot going on in the economy as well at the minute, so brokers and lenders have a duty of care to make sure that we’re not over committing our mutual customers.”

“Along with that, although we want to do more in helping those customers who have larger LTVs, we need to make sure that we don’t over-commit and make sure that we look after them as well.”

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