Llanmoor Homes urges buyers not to lose confidence
Llanmoor Homes urges buyers not to lose confidence
Tim Grey, Sales Director of Welsh home builder Llanmoor Homes, has expressed concern over recent reports of overheating of the housing market, and at recent pressure to remove the government funded Help to Buy shared equity scheme.
Reports have suggested that the Help to Buy scheme could be cut back or completely withdrawn by the government due to fears that the scheme is in part causing the housing market to overheat, with an unsustainable rise in house prices which could have a negative impact on the slowly recovering economy.
Tim Grey feels strongly that “complete removal of the scheme, which was only introduced in Wales on 2nd January this year, will without any doubt result in the market falling back into recession with its huge knock on consequences.” He is keen to urge home buyers to retain their recent confidence in the market and not to put all their faith in reports which, in reference to the Welsh market, can often be misleading.
Tim says, “Help to Buy Wales is helping many first time buyers who would not previously have been able to make that first step onto the property ladder due to the previous requirement for large deposits from the lenders. The scheme is not only helping new home developers and buyers. The increase in sales has enabled us to take on significantly more staff, commence developments that have been on hold during the recession, and importantly pass on the benefits of increased home building to our suppliers, and those such as home furnishing providers and removal companies as well.”
The Help to Buy Wales scheme enables first time buyers and existing home owners to purchase a new build property up to the value of £300,000 with as little as a 5% deposit and 75% mortgage. Home buyers can then take on an equity loan of up to 20% of the home value from the Welsh Government.
Tim acknowledges the problems highlighted by Mark Carney, Governor of the Bank of England, over the effect the rise in house prices could have on the economy, which is still very delicately balanced. However, he is keen to highlight that the recently reported significant increases to house prices in the UK predominantly fall within the London and South East area and do not apply across the country. According to the Office for National Statistics, Wales has one of the lowest increases with as little as 4% in the last year compared to 17% in London.
Tim says, “House prices information relating to London and the South East should ideally not be included in national figures as they significantly distort to true regional picture. There are several factors other than Help to Buy which have caused a rise in London, such as the attraction to foreign investors in these areas, many of whom don’t even take out a mortgage.
“I admit that some adjustments to the scheme criteria may be considered necessary in those areas that are clearly experiencing significant price growth to limit some of the potential negative impacts suggested. In England, Help to Buy is available for homes up to £600,000 compared to £300,000 in Wales, therefore there is some merit in making changes to the scheme in England as far as perhaps a reduction in the maximum price level under the scheme from its current £600,000.’
Llanmoor Homes is one of the only remaining large scale, privately owned house builders in South Wales. Established in 1966, Llanmoor Homes is directed from its headquarters in Talbot Green by brothers Simon, Tim & Matthew Grey, and is currently constructing new homes at a total of six developments.
Llanmoor Homes recorded their best start of the year for sales for over 5 years with reservations taken during the first few months of 2014 double that of the previous year. Tim attributes a significant part of this increase in sales to the launch of the Help to Buy Wales scheme, with around half of the reservations during that period made through Help to Buy.
Tim says, “As has been heavily reported, during the past 6 or 7 years the entire housing market has experienced a period of severe recession and house price deflation. When Help to Buy launched in England in April 2013, it had a significant, positive impact on the English market. We therefore actively called for the introduction of a similar scheme in Wales as a much needed aid to breathe life into the Welsh housing market and I was delighted when, with the support of Carl Sargeant AM Minister for Housing & Regeneration at Welsh Assembly Government, the Help to Buy Wales scheme was introduced in January.”
“Whilst in the past four months we have seen a significant improvement in sales, we are in the very early stages of a recovery and the complete removal or watering down of the one and only assistance scheme here in Wales would have a devastating effect on the new home market here. I strongly believe that the removal of the scheme would result in a complete turn around and would drive the market back into the recession that we are still fighting to get out of.”