In the Spotlight with Hiten Ganatra, Visionary Finance

FR: How will the end of Help to Buy affect the housing market?

It is likely to be responsible for converting what is an already extremely slow housing market into a completely stagnant one.

The numbers speak for themselves on what a success it’s been. The Ministry of Housing, Communities and Local Government has reported that over 300,000 first time buyers have used the Help to Buy scheme allowing them to benefit from essentially borrowing 95% of their share whilst paying the equivalent interest rate of 75% borrowing. Since the launch of the Help to Buy: Equity Loan scheme on 1 April 2013 to 31 December 2018, 210,964 properties were bought with an equity loan. The total value of the loans was £11.71 billion, and the value of the properties sold under the scheme totalled a massive £54.48 billion. Most of the home purchases were made by first time buyers, accounting for 81% of total purchases.

When the scheme comes to an abrupt halt, there will be a big gap in help for would-be first time buyers.

FR: What trends will we see in the buy-to-let market over the next two years and how will it continue to evolve?

The government has spent the last few years trying to edge out one of the biggest and most powerful purchasing forces in the UK market.

As a result the sector is contracting as it’s been impossible for property investors to ignore the pinch felt by the series of tax reforms, including the withdrawal of reliefs and higher stamp duty on rental homes.

Although headlines yields are still better than stashing money in the bank, it’s driving landlords to question whether acquiring further BTL properties is really worth the hassle.

A recent study by Paragon showed that only 13% of landlords are optimistic about their future in the private rental sector and fewer than one in 10 would look to invest in more buy-to-let property. And according to the Residential Landlords Association, a quarter of landlords are currently considering selling up over the next year.

The knock-on effect is that rents are going up. RICS has warned that with small scale landlords pulling out of the market and reducing the supply of rental property, rents could climb by as much as 15% by 2023.

With tenants paying more in rent they are able to save less for a deposit for their own home, delaying home ownership for first-time buyers - the very thing the Government said they wanted to promote. The whole sector could come full circle making BTLs more lucrative due to enhanced rental returns.

Interestingly, the Paragon study also revealed a shift in the types of property landlords are increasingly opting for. More and more landlords are choosing to invest in Houses in Multiple Occupation as they typically produce a higher yield.

FR: How will Brexit affect the expat mortgage market?

Brexit itself is having a positive impact on the mortgage market because of the devaluation of the Pound.

The Pound has fallen over 20% against many of the major currencies - due to the uncertainty Brexit has created about he future - making it cheaper for expats to purchase property in the UK.

Given the soft property market in the UK, expats will be benefiting from a double whammy – lower property prices and getting greater value for money on their purchase.

There are number of specialist lenders in the expat market which means securing lending on UK purchases has never been easier.

FR: housing demand and supply continue to slow? What can be done to attract more people onto the property ladder?

The housing market both from demand and supply perspective will remain stagnant at least until there is further clarity surrounding Brexit and its implications.

There is also the political uncertainty and not knowing what the new PM’s agenda will be on housing.

It is evidently clear that the changes in stamp duty regulations in 2016 has created a softening of the market with both leadership candidates suggesting that stamp duty will be something that will need to be reviewed to help stimulate the property market.

So until some further stability is established the market will remain pretty flat.

Getting back to a fluid and buoyant property market is paramount. But attracting buyers to the market is not easy with uncertainty in stereo at the moment. An overhaul of the stamp duty system is desperately needed. Switching the liability from the buyer to the seller could certainly be the answer. Those moving up the ladder would be paying duty on the lower priced house that they are selling, not the higher price one they are buying.

FR: If you could see one headline about the housing market in 2019, what would it be?

“Government introduces Help to Buy on second hand properties to stimulate the housing market.”