Today's announcement on their approach to Shared Ownership takes a step in that direction. It would benefit young people and families especially if this form of tenure went mainstream with a viable secondary market. A number of building societies are already active in this type of lending and have collectively funded around 50,000 shared ownership mortgages.
We also welcome the addition of London Help-to-Buy which takes much better account of the high prices in the Capital. The extension of an existing scheme is the right way to approach this - simplicity sells - both for lenders and buyers.
The approach to buy-to-let is rather more controversial with two sides to the issue - first time buyers and those needing to rent. Around a third of all private rented properties in the UK are funded through UK buy-to-let mortgages, and a housing market based primarily on home ownership cannot meet the needs of all of the population. A thriving housing market includes a range of tenures which give consumers a choice, for some the flexibility of private rental may be exactly what they need.
The OBR has forecast a fall in property transactions from about 2018 as a result of this move, which comes on top of the tax changes for buy-to-let announced in July. Short term, we anticipate a spike as those planning on investing in buy-to-let in the next year or so may well bring their purchase forward to beat the April 2016 introduction of this higher rate of Stamp Duty.
