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rantnrave

Bellway: End of Help to Buy needs to be managed carefully to 'protect the market'

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Daily Telegraph article pleading for more free money.

Quote

The Government must work out a way to “sensibly exit” its Help to Buy home buying policy in order to protect housebuilders, Bellway has warned.

Ted Ayres, the firm’s chief executive, said he had had meetings with communities secretary Sajid Javid about the end of the programme, which provides equity loans to first time buyers and is due to be wound up in 2021.

The mortgage guarantee part of the scheme, which was designed to encourage banks and building societies to resume offering mortgages to buyers with deposits as small as 5pc, ended at the end of last year.

Figures released by Bellway this morning showed that in the six months to the end of January this year, Help to Buy had been used in almost 35pc of its homes sold, up from 29pc in the same period the previous year.

Mr Ayres said he thought the Government had begun to realise that working out how to take away the assistance for first time buyers needs to be done “sooner rather than later”.

“We’ve got to look at an acceptable exit strategy in 2021 and [Mr Javid] realises that that has to be sooner rather than later because it will affect our land buying from 2018 onwards,” he said.

But he said that he thought the housing market remained strong enough to withstand the buying assistance being withdrawn.

“It’s been a positive move for the sector but we’ve got to the stage now where people are using Help to Buy even though their finances mean they don’t need it, which gives us confidence that the demand is still there.”

The company reported that pre-tax profits had climbed 9.3pc in the six months to the end of January, to £247.6m, while revenue was 5.9pc higher at almost £1.15bn.

Bellway completed 6.5pc more homes than the same period in the previous year, at 4,462, and said its forward order book was up 18pc to £1.4bn.

As a result, it boosted its interim dividend to 37.5p per share from 34p.

The company quickly shrugged off any market uncertainty from the European Union referendum in June, largely because of its focus on mid-market homes in popular east London and around the capital.

Mr Ayres said his biggest concern was finding enough people to build homes. “The workforce isn’t quite as elastic as the sales rate,” he commented.

Anthony Codling, equity analyst at Jefferies, said: “Whilst some [housebuilders] have experienced growing pains, Bellway has delivered growth in volumes alongside improving customer service, and we expect to see more, in both, to come.”

 

http://www.telegraph.co.uk/business/2017/03/21/end-help-buy-needs-managed-carefully-protect-market-bellway/

Edited by rantnrave

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1 hour ago, hotairmail said:

They want notice so they can stop any building.

They might also have to cut their prices 40 per cent in London to offset the loss of the 40 per cent help to buy loan.

What a truly awful man Osborne was - a place surely must be reserved in hell for him. Loads of money for his pet projects and mate yet he slashed funding for social care by 40 per cent.

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11 minutes ago, MARTINX9 said:

They might also have to cut their prices 40 per cent in London to offset the loss of the 40 per cent help to buy loan.

What a truly awful man Osborne was - a place surely must be reserved in hell for him. Loads of money for his pet projects and mate yet he slashed funding for social care by 40 per cent.

And he's been rewarded by the banks and financial institutions by making a (genuine) million within months. He looked after their interests. Now they look after his.

I notice the Telegraph article says "we’ve got to the stage now where people are using Help to Buy even though their finances mean they don’t need it." So, as with most of George's doings, it was nice little ruse to help the already well-off. 

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House builders like BellEnd, may need notice to save up for the compo, as the leasehold scandal could blow up to ppi scale, with many houses now unsellable .

Where were the Gov to protect the Help to buy Ftb'ers from the predatory house builders, selling leaseholds off to vulture type investment funds ? 

Housebuilders must halt leasehold sale of new houses, says minister  

http://www.housepricecrash.co.uk/forum/index.php?/topic/228300-housebuilders-must-halt-leasehold-sale-of-new-houses-says-minister/&page=3

Edited by Saving For a Space Ship

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Very long time lurker.. thought I'd celebrate Section 24 Day with a rare post.

Financial "innovation" lies behind many a speculative bubble.  Arguably BTL and the Northern Rock "Together" (125%) were the poster child for the last boom.  BTL hasn't gone anywhere (yet), but now we have Help to Buy.  The parallels between Together and Help to Buy are ridiculous.

Both are 125% loans.  The resale value of a HtB property is a maximum 80% of the paid price - because the new buyer can't access the government loan, therefore can only afford to pay a maximum of the mortgage without subsidy.  100% / 80% = 125%.  Factor in a new build premium and it's probably even higher.

Both books are now of similar scale.  NR lent around £23bn under Together.  HtB has supported £18bn of property purchase as of last month.  At current lending rates, it'll beat the NR by the end of the year.

Both offered grace periods of 5 years on the unsecured or top up before reverting.

Together lasted 9 years before bringing down the economy, HtB is scheduled to last....9 years.

Whilst I want to see all speculative devices removed (BTL, HtB, Far East off-plan purchases), I am not 100% convinced that HtB as a speculative instrument is necessarily a bad thing.  It does encourage a speculative bubble in new build, which will lead to over-construction in the long-run and bleeds capital out of the mainstream housing market, the effects of which might be to bring about a crash sooner.

Interested in others thoughts.

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On 03/21/2017 at 6:19 PM, MARTINX9 said:

They might also have to cut their prices 40 per cent in London to offset the loss of the 40 per cent help to buy loan.

What a truly awful man Osborne was - a place surely must be reserved in hell for him. Loads of money for his pet projects and mate yet he slashed funding for social care by 40 per cent.

Reserve a special place for him in hell. Chain him and that other truly awful man Brown up together in gimp suits.

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22 minutes ago, shindigger said:

Big Phil is sat in no 11 looking at aways he can "help".

Expect news in the autumn statement.

Relax everyone...

Big Phil is screwed, they haven't got the money for this, particularly has htb is entering a loss now i believe.

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On 3/21/2017 at 6:19 PM, MARTINX9 said:

They might also have to cut their prices 40 per cent in London to offset the loss of the 40 per cent help to buy loan.

What a truly awful man Osborne was - a place surely must be reserved in hell for him. Loads of money for his pet projects and mate yet he slashed funding for social care by 40 per cent.

and apparently at the same time introducing policies with an eye on getting another 5 jobs while still an MP  Another 5 jobs just to start with..

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.

Quote

 

Mr Ayres said his biggest concern was finding enough people to build homes. “The workforce isn’t quite as elastic as the sales rate,” he commented

 

So not only does he want yet more bailouts but he wants more cheap labour.  Basically he doesn't want to put any effort into managing the company he just wants to sit back and sponge off the taxpayer and the work force.

He's not a believer in the stock market motto Leave something for the next man (person) is he.

Edited by billybong

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Since the day it came in I suggested it might be tapered down over years instead of ending overnight. They could do the 20% down to 15% to 10% to 5% over the next 3 years. Though Mr Bellway might be suggesting a slower taper only starting in 2021. 

 

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There was this innovation I used to hear a lot about from the business lobby- it had this catchy name- 'The Free Market' I believe they called it. They were all over it when it came to competiton for jobs among the lower orders- but not so keen when it meant their profits might be under threat from an 'unsupported' market.

Things like 'Help to buy' are just welfare for the 1% disguised as schemes to help out the little guy- just like the Bank Bailouts that saved the 'wealth' of the top 20% while making the reamaining 80% eat the cost.

Socialism never really went away- it just shifted up the socio-economic scale.

 

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