News
Potential buyers being let down by banks
One of Scotland’s leading housebuilders claims the banks’ “unrealistic” lending criteria is causing an unacceptable amount of reservations to fall through.
Grant Ritchie, director of Lomond Homes, says a third of potential buyers are being forced to walk away from sales because they have been refused finance.
And he believes that the housing market will never get a chance to recover unless the banks address the needs of buyers in the £60,000-£100,000 price bracket, by making more mortgage products available.
He said: “Housebuilders are losing out because of the banks’ over-cautious attitudes. Mortgages are supposedly available but, in reality, the criteria they are asking buyers to meet is unrealistic in the current climate so sales are falling through.
“At Lomond Homes we are fortunate in that we have remained relatively strong thorough the recession, with a steady flow of house sales. However the fact remains that we are still losing around a third of our reservations because of these issues around lending, and I have no doubt that other housebuilders will be experiencing the same problem.
“The market is picking up but the banks are still letting us down and this needs to be urgently addressed.”
Grant/Mr Ritchie admits that the banks are not the only ones to blame, and thinks the government needs to take another look at the measures in place to support buyers in a lower price bracket.
He does not believe that the steps announced at the last budget were sufficient, and is eagerly awaiting the forthcoming emergency budget to find out if it will go a step further than Gordon Brown’s.
He said: “March’s budget gave a bit of a helping hand to first time buyers by suspending stamp duty on properties under £250,000, which was a start, but I still felt it stopped disappointingly short of what was needed. This should have been made available to all buyers in this price bracket and not just first-time buyers.
“The aim of Cameron’s budget is to get the economy moving, so I’m keen to see what measures are implemented to achieve this, and whether or not the needs of the housebuilding industry are given the attention they need to get it back on its feet.”
