Help to Buy 2 will ‘fuel builder confidence’
Speaking at an event in London for financial advisers, Nationwide’s chief economist Robert Gardner said while it was hard to gauge the impact of the second part of Help to Buy, the scheme was aimed at fuelling builder confidence as well as increasing the availability of credit.
He said: “Part of the idea of the scheme is to encourage builders to build with the confidence that if they build homes there will be buyers out there.
“There is already a natural incentive for builders to increase their volumes. Demand is there, prices have been increasing – it is in everyone’s interest to get an increase in supply.”
However, Gardner said there were questions about what would happen to the labour market: “It is important to recognise that when you are looking at what is likely to happen, credit availability is only part of the story.
“What happens in the labour market is important in terms of first-time buyer demand going forward. What is going on with wage growth is very important.”
Nationwide expects the Bank of England to keep the base rate low until November 2015. While it does not make future lending forecasts, it expects lending will grow over the next few years, before possibly levelling off as stimulus measures such as Help to Buy expire.
Meanwhile, a Bank of England panel reported this morning there was no evidence increased consumer demand for mortgages aided by the Funding for Lending Scheme and Help to Buy was converting into an increased supply of housing.