Green homes
The current target set by the government is to be ‘net zero’ by 2050.
However, Vikki Jefferies, proposition director of PRIMIS, believes a long-term strategy is needed.
She said: “A rejuvenated version of the Green Homes Grant would be a positive first step, but we also need to consider the energy efficiency of new housing stock, and the methods used for constructing these properties.”
Jefferies also said that while consumer demand and lenders’ appetites remain high, there is more both the industry and government could do to strengthen the sector.
Kevin Roberts, director of Legal & General Mortgage Club, also stressed the importance of the Autumn Budget addressing the green agenda.
He said that cross-industry collaboration between advisers, lenders and homeowners will be crucial to improving the industry as a whole.
Roberts added: “We’ll also need to keep a keen eye on costs, as affordability is one of the key factors preventing many from introducing eco-friendly measures such as insulation.
“We don’t need a harsh diktat, but we do need to stop burying our heads in the sand.”
Kate Davies, executive director of IMLA, said that with COP26 on the horizon, the government will be keen to show its green credentials, especially if the UK is to cut emissions to net zero by 2050.
While there are positives to be drawn from the government introducing a £5,000 grant for homeowners to replace gas boilers with low-carbon heat pumps across England and Wales, Davies said there needs to be more wide-ranging and long-term projects.
She added: “We need to be realistic about how quickly a lot of proposed improvements can be done.
“We know, for example, that supplies of materials, including pumps, are currently limited, as are the number of qualified plumbers and engineers able to install and maintain them.”
Davies also said that thought needs to go towards future energy generation and supply, and that COP26 could provide a platform for the government to reveal some innovations.
Under supply of housing
The government’s target of building 300,000 new homes per year is still a way off, and the chronic under supply of housing has been highlighted over the past 18 months in particular, by rising house prices triggered by high levels of purchase demand.
Jefferies said: “For the market to be healthy and sustainable, the government needs to commit to addressing the under supply of quality housing stock, and we would support the introduction of measures to ensure house building targets are met.”
Davies has seen reports of the new Housing Secretary, Michael Gove, considering a range of options to kick-start the housing market.
She said the Housing Secretary will be acutely aware that more homes need to be built, both in the private and public sectors, and that we have consistently been falling short of the 300,000 annual target which successive governments have aimed at.
Jonathan Stinton, head of intermediary relationships at Coventry for intermediaries, said the Autumn Budget is the Chancellor’s first opportunity to look at the long-term health of the housing market since the pandemic began.
Stinton said that the lack of affordable housing was a problem before COVID-19, and he believes it will continue to be a challenge as we emerge from the pandemic.
He added: “Many renters with the goal of owning their own home are struggling to make it happen, with demand far outpacing supply and pushing prices out of reach.
“We hope to see the Chancellor announce steps to rapidly boost the stock of attainable properties.”
Rob Barnard, director of intermediaries at Masthaven Bank, expects there to be considerable pressure on the affordability of borrowers in the near future, so it is important for the sector to take a step back and understand the trends and shape of the market.
Colin Bell, chief operating officer and co-founder of Perenna believes the fact that property prices are being inflated by demand consistently outpacing supply cannot be ignored.
He said: “The UK continues to fall behind on its target of building 300,000 new homes each year and we hope that Wednesday’s Budget will announce concrete plans to increase the number and quality of homes being built in 2022.”
Support for FTBs
With many government support schemes coming to an end or edging closer to their conclusion, Roberts said it is important that support for FTBs be reassessed by the government.
He said: “With the Help to Buy scheme ending in just over 18 months and the average UK house price having risen by over £25,000 in the year to August 2021, according to the ONS, we need to consider how we can better support those stepping onto the housing ladder who might not have the backing of the bank of mum and dad.”
Barnard said the importance of government-backed initiatives over the course of the pandemic has been fundamental to supporting the economy and individuals.
He added: “The stamp duty holiday injected new life into the housing market during a time of adversity.
“However, now is the time for the property industry to take stock and understand what the new normal in the housing market looks like.”
Barnard believes that more initiatives will be required in the future to help prospective homeowners, particularly first-time buyers, but that the housing market needs a period of stability over the next six months.
He said: “House prices are at a record high, and the coming months are clouded by economic uncertainty, with interest rate rises forecasted sooner than previously expected.”
Davies said that the final withdrawal of Help to Buy in March 2023 will leave a gap, which could present opportunities for new schemes to support younger borrowers with smaller deposits.
She expects demand for higher loan-to-value (LTV) products to remain high and noted that, following the decline in product ranges caused by the early days of the pandemic, many lenders have returned to the higher LTV space.
Davies added: “We don’t expect the government to announce a replacement scheme, but measures aimed at helping first-time buyers save for deposits and get on the housing ladder would be very welcome.”
Bell said: “With the current Help to Buy scheme due to end in 2023, there is both the need and opportunity for the introduction of a new scheme or solution to help first-time buyers with smaller deposits and interest rate affordability challenges, onto the ladder.
“The sector itself is already starting to innovate to support more people locked out of the traditional lending model, with long-term fixed mortgages having the potential to provide a refreshing solution for many.”
Cladding crisis
The cladding crisis has been affecting leaseholders for some time, with no immediate end in sight.
Davies said that this has been further complicated by the addition of more surveys and reports which have resulted in the discovery of other defects that require remediated, causing further delays.
The result in some cases has been that thousands of flat owners have been presented with unaffordable bills to make their homes safe.
Some lenders have revealed their stance on whether they will lend on properties following the RICS guidance, however they will largely assess on a case-by-case basis.
Davies said: “It is unacceptable that leaseholders should ultimately be expected to foot the bill for poor workmanship and careless inspections at the building stage, often long before they purchased their homes.
“At the very least there should be effective legal provision for them to challenge their freeholders and to redress the balance regarding who pays.”
