WEBVTT - Can new build housing meet demand in 2026? 0:00:02.910 --> 0:00:07.110 Hello, this is Mortgage Insider from Barclays. I'm Phil Spencer, 0:00:07.110 --> 0:00:10.800 TV presenter and property expert, and this is the series 0:00:11.039 --> 0:00:13.260 where you'll learn everything you need to know about the 0:00:13.260 --> 0:00:18.509 mortgage industry. Today, we're looking at new build in 2026. 0:00:19.170 --> 0:00:22.410 Now, the government has pledged one and a half million new 0:00:22.410 --> 0:00:25.170 homes over the next five years, but the number of 0:00:25.170 --> 0:00:28.380 new homes approved fell at the end of last year. 0:00:28.860 --> 0:00:32.640 So how are house builders working to meet that challenge? 0:00:33.240 --> 0:00:35.880 And what are the trends that we can expect in the year 0:00:35.880 --> 0:00:39.180 ahead? It's a really fascinating time. How has the industry 0:00:39.180 --> 0:00:42.270 evolved since the end of Help to Buy as well? 0:00:42.450 --> 0:00:45.839 Well, to answer all these conundrums and more, I'm joined 0:00:45.840 --> 0:00:50.640 by Neil Jefferson, chief executive of the Home Builders Federation, and 0:00:50.640 --> 0:00:55.830 Craig Hall, who is the director of strategic partnerships at LSL Financial 0:00:55.830 --> 0:00:58.830 Services. Hello to you both. Thank you for coming on. 0:00:59.400 --> 0:01:00.270 Great to see you both. 0:01:00.270 --> 0:01:02.550 Lots to talk through today. I think it's a really interesting 0:01:02.550 --> 0:01:05.970 and relevant topic. Neil, if you can just kick off, 0:01:06.120 --> 0:01:08.580 Home Builders Federation, or HBF. 0:01:08.670 --> 0:01:11.700 Yes. Home Builders Federation, we represent the vast majority of 0:01:11.700 --> 0:01:14.400 home builders in England and Wales. Our members build 80% 0:01:14.400 --> 0:01:17.160 of all homes, so it's quite a big footprint. So 0:01:17.160 --> 0:01:21.060 we represent them with government media, bring them together, work 0:01:21.060 --> 0:01:23.818 together on unproductive and progressive schemes. 0:01:23.970 --> 0:01:26.790 Thank you. And, Craig, what's your role at LSL? 0:01:27.090 --> 0:01:29.880 Yeah, so I'm director of strategic partnerships for our financial 0:01:29.880 --> 0:01:33.000 services division. So LSL Property Services Group, we have a 0:01:33.000 --> 0:01:36.120 financial services division, we have an estate agency division, and 0:01:36.120 --> 0:01:38.190 we also have e. surv chartered surveyors. So we are 0:01:38.190 --> 0:01:40.050 experts across all things housing. 0:01:40.260 --> 0:01:44.819 How do you see sentiment? Going into this year, how 0:01:44.819 --> 0:01:46.110 are people feeling generally? 0:01:46.230 --> 0:01:49.470 I think there's expectation. There's a bit of optimism. I 0:01:49.470 --> 0:01:53.370 think it's been quite a challenging time. Politically, new government, 0:01:53.370 --> 0:01:56.670 and 18 months in, of course, the reality is that house- 0:01:56.670 --> 0:02:00.210 building in the UK and England and Wales certainly is 0:02:00.210 --> 0:02:03.720 flatlining. In fact, we've seen two consecutive years of decreases, 0:02:03.720 --> 0:02:06.690 7% each year, in terms of housing supply. So we 0:02:06.690 --> 0:02:09.660 need to turn that corner, so I think this year 0:02:09.660 --> 0:02:12.510 is an interesting year for the industry. The industry is 0:02:12.510 --> 0:02:15.060 certainly set to deliver that growth. They have been for 0:02:15.060 --> 0:02:17.520 as long as labor have been in government, but there 0:02:17.520 --> 0:02:18.990 are quite a few issues that we need to get 0:02:18.990 --> 0:02:20.610 through, which I'm sure we'll discuss today. 0:02:21.090 --> 0:02:23.519 And, Craig, how do you see things, general sentiment? 0:02:23.730 --> 0:02:29.940 Yeah, I think the sentiment is really positive in the broker 0:02:29.940 --> 0:02:32.490 world and in the lender world. I think there's a 0:02:32.490 --> 0:02:36.930 real huge appetite for mortgage lenders, which is fantastic. We've 0:02:36.930 --> 0:02:39.510 come a long way in the last 13, 14 years 0:02:39.510 --> 0:02:41.669 since the early days of when Help to Buy was 0:02:41.669 --> 0:02:43.919 born, and a lot of the lenders had sort of 0:02:43.919 --> 0:02:45.630 ran to the hills as far as new build was 0:02:45.630 --> 0:02:48.990 concerned post the global financial crisis. So we are now back in 0:02:48.990 --> 0:02:53.340 a much more stronger place with mortgage lending support, so 0:02:53.340 --> 0:02:56.040 I think going into this year, it looks like it'd 0:02:56.040 --> 0:02:57.990 be a strong year from a demand point of view. 0:02:58.080 --> 0:03:01.230 Yeah, I completely agree. It was such a quiet end 0:03:01.230 --> 0:03:04.560 to last year for various reasons, but actually life goes 0:03:04.560 --> 0:03:08.190 on. People still change jobs and get married and have 0:03:08.190 --> 0:03:12.179 babies and get divorced and die, and those things continue 0:03:12.180 --> 0:03:15.600 to happen. I read that actually Boxing Day was a 0:03:15.600 --> 0:03:18.720 complete record in terms of the numbers of people that 0:03:18.720 --> 0:03:20.280 were active on the portals. 0:03:20.370 --> 0:03:22.380 And we're seeing that in our numbers. The last couple 0:03:22.380 --> 0:03:26.340 of weeks we've really started to see mortgage application numbers 0:03:26.580 --> 0:03:27.210 really tick up. 0:03:27.570 --> 0:03:30.840 Because there's an interesting time lag, isn't there, between people 0:03:30.840 --> 0:03:33.960 taking the decision, let's move, let's buy, let's sell. They 0:03:33.960 --> 0:03:38.880 probably come to you first, and then the estate agents 0:03:38.880 --> 0:03:41.940 get busy. Actually, the builders have to react, and that's 0:03:41.940 --> 0:03:42.990 an even longer time lag. 0:03:43.020 --> 0:03:46.050 Yeah, and part of the challenge actually is predicting future 0:03:46.050 --> 0:03:49.140 demand and looking ahead to see what the environment may 0:03:49.140 --> 0:03:51.750 be. But I agree, it is quite difficult to predict 0:03:52.440 --> 0:03:54.990 looking ahead with some of the uncertainties. And the way 0:03:55.020 --> 0:03:56.970 the budget works these days as well, which is different 0:03:57.690 --> 0:03:59.820 to when I was young, the budget was kind of 0:03:59.850 --> 0:04:03.390 not a big deal and largely something that happened, and 0:04:03.390 --> 0:04:06.839 the price of beer and petrol change. Now, the kites 0:04:06.840 --> 0:04:09.870 that get flown by government to test the various things 0:04:09.870 --> 0:04:13.560 that they may change creates some uncertainty sometimes within the 0:04:13.560 --> 0:04:15.390 marketplace, which is certainly what we saw last year. 0:04:15.450 --> 0:04:19.320 Yeah. Let's get into a bit of detail of any 0:04:19.320 --> 0:04:24.029 trends that you anticipate seeing across the year. Any thoughts 0:04:24.029 --> 0:04:26.790 on that? What are we likely to feel and see? 0:04:27.029 --> 0:04:29.339 I think we're now into that buying season again, aren't 0:04:29.339 --> 0:04:32.130 we? As I said, sort of post the winter period, 0:04:33.360 --> 0:04:35.099 we tend to see those peaks and troughs in the 0:04:35.100 --> 0:04:39.900 market. I think the key question for me is when 0:04:39.900 --> 0:04:42.120 will we start to see that supply come on side? 0:04:42.120 --> 0:04:46.080 There's definitely that demand there. Things are more affordable now, 0:04:46.080 --> 0:04:48.510 which I'm sure will come onto the whys and wherefores. 0:04:48.510 --> 0:04:51.330 But it'd be really interesting to know from Neil what 0:04:51.330 --> 0:04:54.300 his members are telling us around what are they building 0:04:54.300 --> 0:04:55.830 and when and when will we start to see that 0:04:56.279 --> 0:04:57.300 come on the market. 0:04:57.300 --> 0:04:59.370 It's fascinating, isn't it? Because it's chicken and egg. 0:04:59.520 --> 0:04:59.789 Absolutely. 0:04:59.790 --> 0:05:02.940 You need the demand, but you've got to have the 0:05:02.940 --> 0:05:05.400 activity. You've got to have the activity, then you get the demand. Yeah. 0:05:05.640 --> 0:05:08.909 No, I think for us, one of the challenges in 0:05:08.910 --> 0:05:12.300 recent years has been planning, and I think you always 0:05:12.300 --> 0:05:14.700 hear that from the home- building industry. But at the back 0:05:14.700 --> 0:05:17.039 end of the last government, it was particularly difficult because they 0:05:17.040 --> 0:05:20.880 changed planning rules, abandoned local housing targets. So it takes 0:05:20.880 --> 0:05:23.100 some time to recover from that. And therefore, we run 0:05:23.100 --> 0:05:26.430 a housing pipeline, which actually looks at planning applications, and 0:05:26.430 --> 0:05:28.770 that's basically been at an all- time low. However, I'd 0:05:28.770 --> 0:05:30.120 say one of the reasons for me to be more 0:05:30.120 --> 0:05:35.130 optimistic is actually with the change to the planning policy, 0:05:35.130 --> 0:05:38.520 which is the National Planning Policy Framework, the MPPF, and also 0:05:38.970 --> 0:05:41.070 the new act, the Planning and Infrastructure Act, which was 0:05:41.070 --> 0:05:43.680 a bill until just a few weeks ago. I think 0:05:43.680 --> 0:05:46.620 there are reasons to be cheerful. There's also designation of 0:05:46.620 --> 0:05:48.750 gray belt and so on. So I think we will 0:05:48.750 --> 0:05:51.570 see an increase in a number of applications going in 0:05:51.870 --> 0:05:55.469 for new homes. That creates a challenge for under- resourced 0:05:55.470 --> 0:05:58.800 and overworked local planning authorities, which will be a test. 0:05:59.070 --> 0:06:00.779 But I think we can expect there to be more 0:06:00.779 --> 0:06:04.740 applications going in, which eventually, Phil, I hope feeds into 0:06:05.400 --> 0:06:08.970 more housing supply. But we do need this translation, as 0:06:08.970 --> 0:06:12.870 Craig says, from the underlying demand, which is absolutely huge, 0:06:13.170 --> 0:06:15.120 that needs to become effective demand. There needs to be 0:06:15.120 --> 0:06:17.669 ways of making sure that people are aware that actually 0:06:17.670 --> 0:06:20.460 they can enter into homeownership and they need support for 0:06:20.460 --> 0:06:21.900 that as well, which I'm sure we'll talk about. 0:06:22.500 --> 0:06:25.409 Can we just go back to the planning departments and 0:06:25.410 --> 0:06:28.920 the planning reform and whether there was simply enough people 0:06:28.920 --> 0:06:32.370 in the planning departments to service the demand? And if 0:06:32.370 --> 0:06:35.760 there isn't, when will there be, and whose responsibility is that? 0:06:35.790 --> 0:06:41.159 Yes. Even in opposition, we worked with labor to think 0:06:41.160 --> 0:06:44.400 about the changes they needed to make to ease the 0:06:44.400 --> 0:06:47.760 planning process and get more capacity within this system. And 0:06:47.760 --> 0:06:51.180 through the new policy framework, the MPPF, also the Planning 0:06:51.180 --> 0:06:54.000 and Infrastructure Act, which was enacted at the end of 0:06:54.000 --> 0:06:57.300 last year, we're seeing some positive changes, the reinstruction of local housing 0:06:57.300 --> 0:06:59.969 targets, the concept of the gray belt, even new towns. 0:06:59.970 --> 0:07:03.600 So there's lots of positivity. The second bit is delays, 0:07:03.600 --> 0:07:06.930 and actually particularly for smaller businesses. It's often the delays 0:07:06.930 --> 0:07:09.120 which are the real problem if they've got borrowings for 0:07:09.120 --> 0:07:11.700 land and they need to get on site more quickly. 0:07:11.880 --> 0:07:15.090 So to be fair to the government, they recognize that we need more planners in 0:07:15.090 --> 0:07:17.940 the system and they committed to bringing in 300 more 0:07:17.940 --> 0:07:19.680 planners a year, which is really a drop in the 0:07:19.680 --> 0:07:22.500 ocean. We estimate we need about 2, 500, but it's 0:07:22.500 --> 0:07:26.100 really, really welcome that that's been recognized. And actually in 0:07:26.100 --> 0:07:28.950 terms of looking at exemptions for small sites and finding 0:07:28.950 --> 0:07:32.040 ways of easing that so that the planning officers can 0:07:32.040 --> 0:07:35.220 actually focus on the bigger issues within their areas, that's 0:07:35.220 --> 0:07:36.960 been something we've seen from this government. And I think 0:07:36.960 --> 0:07:37.830 there's more to come on that. 0:07:38.130 --> 0:07:40.890 So do you think that we're relaxing bureaucracy in order to 0:07:40.890 --> 0:07:41.190 speed things up? 0:07:41.190 --> 0:07:45.750 Yeah. Some of the newer things like, which is uncontested by the 0:07:45.750 --> 0:07:48.840 industry, but things like biodiversity net gain, which means actually 0:07:48.900 --> 0:07:52.530 that post- development, the site has got better biodiversity credentials 0:07:52.530 --> 0:07:56.070 than before it was developed, and that's been managed. But 0:07:56.070 --> 0:08:00.090 actually that creates a huge amount of work for local 0:08:00.090 --> 0:08:02.880 planning authorities. There's only a certain number of ecologists in 0:08:02.880 --> 0:08:05.670 the country. So for very small sites, you can understand 0:08:05.670 --> 0:08:08.370 that perhaps that needs to be fast- tracked or eased 0:08:08.640 --> 0:08:11.040 and so that the fewer reports are required so that 0:08:11.040 --> 0:08:14.880 actually the local- level offices are able to focus on 0:08:14.880 --> 0:08:15.510 the big sites. 0:08:15.870 --> 0:08:18.780 And if and when there are enough planning officers and 0:08:18.780 --> 0:08:22.800 they can approve things, are there enough skilled builders to actually 0:08:23.730 --> 0:08:24.420 build the property? 0:08:24.420 --> 0:08:26.520 That's a great question, and I think actually there's a 0:08:26.520 --> 0:08:30.300 lot of preparation going on in expectation of an increasing 0:08:30.300 --> 0:08:33.059 housing supply to get more people into the industry. To 0:08:33.059 --> 0:08:35.640 be truthful, at the moment, because we've seen two years 0:08:35.640 --> 0:08:39.270 of housing decline and some particularly difficult markets such as 0:08:39.870 --> 0:08:42.630 London, skills doesn't come up as the biggest issue for 0:08:42.630 --> 0:08:44.520 us and our members at the moment, but it will 0:08:44.520 --> 0:08:46.679 do. There's an awful lot of work going on to 0:08:46.679 --> 0:08:49.230 prepare for the future, to get a more diverse pipeline 0:08:49.230 --> 0:08:51.569 of people coming into the industry, to think about the 0:08:51.570 --> 0:08:53.640 skills that are needed, how we train them. There's various 0:08:53.640 --> 0:08:56.429 initiatives going on around the country, such as skills hubs. 0:08:56.429 --> 0:08:58.710 And through us, actually, at the Home Builders Federation, we're 0:08:58.710 --> 0:09:01.679 working with a number of colleges to improve the quality 0:09:01.679 --> 0:09:06.840 of what's happening there. And also, of course, last week 0:09:06.840 --> 0:09:10.319 I was at the opening of another new factory. One 0:09:10.320 --> 0:09:14.040 of our largest members, Bellway Homes, have opened a really 0:09:14.040 --> 0:09:18.209 impressive robotic factory up in the Mansfield area. So there's 0:09:18.210 --> 0:09:22.800 this move towards offsite manufacturer, particularly with wall panels, which 0:09:22.800 --> 0:09:24.600 again means that homes can be built offsite- 0:09:24.600 --> 0:09:24.601 Quicker. 0:09:24.601 --> 0:09:25.441 ... and more quickly. Yeah. 0:09:25.441 --> 0:09:26.579 Yeah. And more efficiently. 0:09:26.730 --> 0:09:29.370 Absolutely. Yeah. And that creates more opportunities as well in 0:09:29.370 --> 0:09:31.980 terms for people to work in a factory environment that 0:09:31.980 --> 0:09:34.079 may not be able to work out on site. 0:09:34.410 --> 0:09:37.650 Neil, you mentioned London, and I read something over the 0:09:37.650 --> 0:09:41.580 weekend that house- building in London's fallen 80% in the 0:09:41.580 --> 0:09:44.700 last 10 years. There's only 5, 500 new homes in 0:09:44.700 --> 0:09:49.170 London last year. That's a really low number. Is it 0:09:49.230 --> 0:09:52.980 to do with, and I use inverted commas, the improvement 0:09:53.340 --> 0:09:54.929 in building safety regulations? 0:09:54.929 --> 0:09:55.260 Yeah. 0:09:55.290 --> 0:09:57.210 And I shouldn't laugh at that because it's a very 0:09:57.210 --> 0:09:57.960 serious issue. 0:09:57.990 --> 0:10:01.500 Yeah, and I think actually there is an issue, though. The 0:10:01.500 --> 0:10:03.840 standards are well understood, and there's been new standards brought 0:10:04.020 --> 0:10:07.620 in terms of the use of combustible materials and also 0:10:07.620 --> 0:10:10.650 the requirement into all buildings for two staircases. There's been 0:10:10.650 --> 0:10:12.870 a new building safety regulator, which has come in, which 0:10:12.870 --> 0:10:15.450 does building control on all of those high- risk buildings. 0:10:15.450 --> 0:10:18.270 And that's been admitted. They've admitted they've been under- resourced. 0:10:18.540 --> 0:10:21.000 But it's under new leadership. There's been some good announcements 0:10:21.000 --> 0:10:23.370 recently. But there are some legacy issues to be dealt 0:10:23.370 --> 0:10:26.100 with. But London, it is catastrophic. I mean, out of 0:10:26.100 --> 0:10:29.160 the 1. 5 million new homes that should be delivered 0:10:29.160 --> 0:10:31.920 within this parliament, 25% of those should come out of 0:10:31.920 --> 0:10:35.280 London, and the numbers that you're talking about are absolutely... 0:10:35.910 --> 0:10:38.220 It's terrible. But I wouldn't just say it's to do 0:10:38.220 --> 0:10:41.550 with building safety and standards. Actually, in many ways, London 0:10:41.550 --> 0:10:44.730 has been affected by issues of regarding viability because there 0:10:44.730 --> 0:10:47.490 are so many developer contributions that are required. In London, 0:10:47.880 --> 0:10:50.699 there's not just one community infrastructure levy; it's like payments 0:10:50.700 --> 0:10:56.070 to local authorities. There's two. And there's all of the other costs that have come in. And since COVID, we've seen 0:10:56.070 --> 0:10:59.160 a significant increase in build costs, which means that so 0:10:59.160 --> 0:11:03.480 many sites are not viable or difficult. And also affordability 0:11:03.480 --> 0:11:05.670 as well. The prices are so high, for the first 0:11:05.670 --> 0:11:08.220 time in 60 years, there isn't a scheme to support, 0:11:08.220 --> 0:11:10.890 a government scheme, to support first- time buyers. So they've 0:11:10.890 --> 0:11:13.260 all added together, and I think actually London is a 0:11:13.260 --> 0:11:15.090 bit of an insight into what's happening in some of 0:11:15.090 --> 0:11:17.700 our other challenged housing markets around the country. 0:11:17.730 --> 0:11:20.910 Okay. Now the HBF put out a big report in 0:11:20.910 --> 0:11:23.760 January called The Broken Ladder, and it highlighted that the 0:11:23.760 --> 0:11:29.189 challenges of affordability or the affordability gap between prices and 0:11:29.190 --> 0:11:32.160 earnings and actually what people can do. Can you just 0:11:32.160 --> 0:11:34.230 talk a bit about the conclusions from that? 0:11:34.230 --> 0:11:37.679 Yeah, sure. So this is something we publish quite regularly. 0:11:37.679 --> 0:11:39.750 This is the third in The Broken Ladder series, and 0:11:40.080 --> 0:11:43.319 the latest one shines a light on what's happening with 0:11:43.320 --> 0:11:47.460 homeownership. The government has targets for homeownership and increasing homeownership, 0:11:47.460 --> 0:11:49.140 but in fact, it's falling. And one of the key 0:11:49.140 --> 0:11:51.780 findings, I think, from that report, it makes many points, 0:11:52.050 --> 0:11:56.160 but actually is the gap, the 1. 5 million potential 0:11:56.160 --> 0:11:58.260 homeowners that have missed out, they could have been on 0:11:58.260 --> 0:12:03.630 the ladder between 2003 and 2026, and that's because affordability 0:12:03.929 --> 0:12:07.410 has fallen so much. And the conclusion of the report 0:12:07.410 --> 0:12:09.420 is that what we're saying, is that the government should 0:12:09.420 --> 0:12:12.630 be looking at a new scheme, government- backed equity loan 0:12:12.630 --> 0:12:16.170 scheme. We take our lessons from the various schemes or 0:12:16.200 --> 0:12:18.959 our learnings from the various schemes that have existed in 0:12:18.960 --> 0:12:21.329 recent years. As I said earlier, it's the first time 0:12:21.330 --> 0:12:24.360 in 60 years there isn't a government- backed scheme for 0:12:24.360 --> 0:12:27.780 buyer, first- time buyers, and it's most desperately needed. So 0:12:28.050 --> 0:12:29.790 where we are, I think when you read the report, 0:12:29.790 --> 0:12:32.070 Phil, you'll see that there's a lot of talk over 0:12:32.400 --> 0:12:36.150 recent years about deposits and closing the gap and making 0:12:36.150 --> 0:12:39.000 sure that the deposits... We're beyond that now. It's now we're 0:12:39.000 --> 0:12:43.170 into affordability where actually what's needed, Bank of Mom and 0:12:43.170 --> 0:12:46.380 Dad, is actually beyond what a mortgage lender would require 0:12:46.380 --> 0:12:48.630 as a deposit, but actually a much bigger deposit in 0:12:48.630 --> 0:12:50.130 order to make the home affordable. So we've got to 0:12:50.130 --> 0:12:53.460 think about ways of, as I said earlier on, making 0:12:53.520 --> 0:12:57.000 that underlying demand, which is huge, more effective. 0:12:57.390 --> 0:13:01.320 Craig, Bank of Mom and Dad, in my mind's eye, 0:13:01.320 --> 0:13:03.990 I think it's the 10th biggest lender. Is that about right? 0:13:03.990 --> 0:13:05.939 Yeah, I think it still is. Yeah. I don't think 0:13:07.050 --> 0:13:10.350 the official figures have been published for 25, but estimations 0:13:10.350 --> 0:13:13.590 were about 10 billion pounds worth of, I say lending, 0:13:13.590 --> 0:13:19.380 probably more like funding, gifting. And it's actually been rebranded, 0:13:19.380 --> 0:13:21.510 I think, by the industries the Bank of Family because 0:13:21.510 --> 0:13:25.050 it's going beyond mom and dad. It's nan, granddad, aunties, 0:13:25.050 --> 0:13:28.709 uncles, and even friends and wider family are supporting with 0:13:29.309 --> 0:13:31.350 that deposit to get the step on the ladder. I 0:13:31.800 --> 0:13:34.770 think the average deposit is in the region about 30, 000 pounds 0:13:34.770 --> 0:13:39.449 gifted from the Bank of Family. So it plays into 0:13:39.480 --> 0:13:42.870 what Neil was saying around that huge affordability challenge and 0:13:42.870 --> 0:13:43.800 raising the deposit. 0:13:43.890 --> 0:13:47.010 And, Craig, Help to Buy was finished in England in 0:13:47.010 --> 0:13:48.870 2023, but it continues in Wales. Is that right? 0:13:48.900 --> 0:13:49.920 Correct. Yeah. Yeah. 0:13:50.130 --> 0:13:53.490 Is there anything on the horizon to replace it? 0:13:54.750 --> 0:13:57.990 So you're right, it finished in '23 at a time 0:13:57.990 --> 0:14:01.800 when interest rates went up. So at a time when 0:14:01.800 --> 0:14:04.890 we needed it most, the scheme was withdrawn. We saw 0:14:04.890 --> 0:14:07.170 the base rate go up to, what was it, about 5. 0:14:07.170 --> 0:14:12.750 75, 6%? I can't remember where it peaked now. And during the COVID era, the 0:14:12.750 --> 0:14:15.750 base rate was at 0. 1%, and Help to Buy was still 0:14:15.750 --> 0:14:19.710 available. So we've seen house prices continue to increase, albeit 0:14:19.770 --> 0:14:22.560 ease off a little bit, so that affordability challenge that 0:14:22.560 --> 0:14:25.740 Neil talked about is still absolutely there. In terms of 0:14:25.740 --> 0:14:27.420 what's filling the gap, I think there's been a few 0:14:27.420 --> 0:14:29.700 things over the last sort of 12 months that have been some real 0:14:29.700 --> 0:14:33.990 positive movements in the market. Some of the regulations have 0:14:33.990 --> 0:14:38.280 been relaxed with lenders around stress testing and things like loan- to- 0:14:38.280 --> 0:14:41.130 income caps. So what we've seen is that the sort 0:14:41.130 --> 0:14:45.480 of average increase for borrowers is about 35, 000 pounds more 0:14:45.750 --> 0:14:48.930 just by some of those moves that have allowed the 0:14:48.930 --> 0:14:50.940 lenders to be a bit more flexible with their lending 0:14:50.940 --> 0:14:55.140 policy, all of which then boosts affordability. I think the 0:14:55.140 --> 0:14:58.290 challenge is, though, is that a lender may say, " We 0:14:58.290 --> 0:15:02.970 will lend you X." I think in the last couple of 0:15:02.970 --> 0:15:05.340 months, actually, we've seen a number of the top six 0:15:07.140 --> 0:15:11.700 lenders move to six times loan to income, which is 0:15:11.700 --> 0:15:14.010 huge. That you used to cap out many, many years 0:15:14.010 --> 0:15:16.170 ago three and a half, four times, four and a half times. 0:15:16.170 --> 0:15:20.340 So we've started to see lenders push the boundaries, but 0:15:20.970 --> 0:15:25.110 looking at then the costs per month, how desirable is 0:15:25.110 --> 0:15:27.690 that? And I think, again, that's where it plays into 0:15:27.690 --> 0:15:30.420 Neil's point around where Help to Buy made it more 0:15:30.420 --> 0:15:32.700 affordable, more easier on the eye as part of that 0:15:32.700 --> 0:15:34.380 monthly affordability. 0:15:34.920 --> 0:15:36.810 Yeah. What's the story in Wales? 0:15:37.560 --> 0:15:41.160 So in Wales, the scheme, because it's a devolved government, Help 0:15:41.160 --> 0:15:45.120 to Buy still exists, and it will close in 2027 0:15:45.120 --> 0:15:47.940 as it currently stands. Again, they had a scheme in 0:15:47.940 --> 0:15:52.710 Scotland, but the scheme sold out within no time. So 0:15:53.580 --> 0:15:56.550 you've got different challenges in different regions of the UK. 0:15:57.420 --> 0:15:59.310 Neil, do you think we'll see something to replace Help 0:15:59.310 --> 0:15:59.850 to Buy? 0:15:59.910 --> 0:16:01.500 Oh, I hope so, Phil. I mean, I think there's 0:16:01.500 --> 0:16:04.020 speculation in the media at the moment, and there's no 0:16:04.020 --> 0:16:06.750 doubt there's conversations going on. I think the biggest challenge 0:16:06.750 --> 0:16:09.300 that we have is that there's a view in some quarters, 0:16:09.300 --> 0:16:12.150 maybe within parts of government, that Help to Buy was 0:16:12.150 --> 0:16:14.430 inflationary, and the one thing this government doesn't want to 0:16:14.430 --> 0:16:18.180 do is drive up house prices. And so one thing 0:16:18.870 --> 0:16:20.760 that we're really looking forward to, and it's overdue, by the way, is that 0:16:21.480 --> 0:16:25.260 the government's actually carrying out its own evaluation of the Help 0:16:25.260 --> 0:16:27.150 to Buy scheme. And I thought that would be out 0:16:27.150 --> 0:16:29.280 by now. It's actually now due to be completed by 0:16:29.280 --> 0:16:32.010 May. And I think that will dispel a few myths 0:16:32.070 --> 0:16:35.550 with regards to what Help to Buy did in terms 0:16:35.550 --> 0:16:40.470 of increasing homeownership and increasing housing supply, and also, I 0:16:40.470 --> 0:16:43.170 think it will be clearer with regards to the impact 0:16:43.170 --> 0:16:45.660 it did have on house price inflation. Which I think 0:16:45.870 --> 0:16:47.820 if there was any house price inflation... And I can 0:16:47.820 --> 0:16:50.160 show you the charts that show the average price of 0:16:50.160 --> 0:16:52.859 a new home matched against an existing home over that 10- 0:16:52.860 --> 0:16:56.729 year period, and they're perfectly matched. If anything, the existing 0:16:56.730 --> 0:16:58.470 home has got its nose ahead at the end. So 0:16:58.470 --> 0:17:00.479 I think that report is well overdue. I really hope 0:17:00.480 --> 0:17:03.720 the government does grasp the nettle. It's massively overdue. We've 0:17:03.720 --> 0:17:07.410 got a proposal in. The Labor, actually, in not opposition 0:17:07.410 --> 0:17:10.080 coined this name of Freedom to Buy, so we've gone 0:17:10.080 --> 0:17:12.359 with that. And we've looked at these various schemes that 0:17:12.359 --> 0:17:14.820 have existed, and we think, actually, that developers can make 0:17:14.820 --> 0:17:17.700 a contribution to the scheme. Government can back it out. 0:17:18.030 --> 0:17:20.879 And half of those loans, Craig, have been redeemed now. 0:17:20.880 --> 0:17:24.150 And I know there's half a book to get through, 0:17:24.540 --> 0:17:28.619 but it looks quite positive. So in my world, and 0:17:28.619 --> 0:17:32.070 our members are very diverse, they don't all build for first- 0:17:32.070 --> 0:17:36.330 time buyers, but it's absolutely unanimous. They completely agree as 0:17:36.330 --> 0:17:39.450 a membership that there needs to be a scheme for first- 0:17:39.450 --> 0:17:42.119 time buyers to get the whole of the market going 0:17:42.119 --> 0:17:45.240 again. So fingers crossed, let's hope so, but we've got some 0:17:45.240 --> 0:17:45.658 work to do. 0:17:46.050 --> 0:17:48.060 And I think... Sorry, Phil... I think the other thing to say 0:17:48.060 --> 0:17:51.720 is that shared ownership plays an important role. There's a 0:17:51.720 --> 0:17:55.050 report done I think by the CIH in 2017 that 0:17:55.050 --> 0:17:57.810 said there were 10 buyers for every one shared ownership 0:17:57.810 --> 0:18:01.050 unit back then. I would imagine that has increased significantly 0:18:01.050 --> 0:18:04.500 due to everything we've talked about with affordability. We've seen 0:18:04.500 --> 0:18:09.030 lender innovation with policy and criteria, and we've also seen 0:18:09.030 --> 0:18:13.020 a private scheme recently take off. Barclays are a supporter 0:18:13.020 --> 0:18:15.780 of a scheme called Reside, so that is a private shared- 0:18:15.780 --> 0:18:19.050 equity scheme trying to mirror the Help to Buy scheme, 0:18:19.080 --> 0:18:22.080 albeit it's backed by private equity; therefore, it comes with 0:18:22.080 --> 0:18:25.320 an interest charge on the equity loan from day one. 0:18:25.770 --> 0:18:27.660 Whereas Help to Buy was interest- free for five years, 0:18:27.660 --> 0:18:27.990 of course. 0:18:28.200 --> 0:18:31.770 So really, there's innovation coming thick and fast from all quarters. 0:18:31.770 --> 0:18:35.281 Oh, yeah. Yep. Yeah. 0:18:35.281 --> 0:18:38.490 I would just make the point that really welcome the work that lenders, including Barclays, have 0:18:38.490 --> 0:18:41.369 done. They've really responded to the government's request for them 0:18:41.369 --> 0:18:45.900 to have a think about their lending. But for me, 0:18:45.900 --> 0:18:49.859 it's about discoverability, and as Craig says, as you said, actually, 0:18:49.859 --> 0:18:53.910 Phil, the problem is that perhaps that potential home buyers 0:18:53.910 --> 0:18:56.520 are only aware of what they can borrow and actually 0:18:56.520 --> 0:19:00.000 get to see their broker. Whereas when there's a government- 0:19:00.000 --> 0:19:03.840 backed national scheme and signs are all up can actually think, " 0:19:03.840 --> 0:19:06.480 Yeah, this could be the time." So there's been some 0:19:06.480 --> 0:19:09.929 great work done by lenders. We welcome the private schemes 0:19:09.930 --> 0:19:12.419 which have been aiming at taking the place of Help 0:19:12.420 --> 0:19:14.730 to Buy, the gap that was being left, but there's 0:19:14.910 --> 0:19:15.720 more needed. Yeah. 0:19:16.140 --> 0:19:19.380 One last question on supply, if I may. So we've 0:19:19.380 --> 0:19:23.340 talked about the planning reform, and I'm wondering, will we 0:19:23.340 --> 0:19:26.010 ever see a day where the councils can build for themselves? 0:19:26.070 --> 0:19:30.900 Yeah. I think this government certainly would like to see 0:19:30.900 --> 0:19:33.689 that. You mentioned earlier on about the skills gap, and the 0:19:33.690 --> 0:19:36.510 truth is is that back in the days or decades ago 0:19:36.510 --> 0:19:39.900 when many homes were built by local authorities, council houses, 0:19:40.740 --> 0:19:42.210 they had all the skills in- house to do that, 0:19:42.210 --> 0:19:45.030 and that's been lost over years. The truth is we 0:19:45.030 --> 0:19:49.410 need as much diversity in housing suppliers we can, so 0:19:49.410 --> 0:19:52.830 we need homes for private sale, we need shared ownership, 0:19:52.830 --> 0:19:56.310 all the different tenures. We need the private sector, institutional 0:19:56.310 --> 0:19:58.889 investors, to step up for Build to Rent. And there is 0:19:58.980 --> 0:20:02.040 a desire, I think, to see local authorities also step 0:20:02.040 --> 0:20:04.679 into that place, as well as housing associations. And to 0:20:04.680 --> 0:20:06.810 give credit to the government, the one thing it did 0:20:06.810 --> 0:20:08.760 do last year was to put quite a bit of 0:20:08.760 --> 0:20:10.980