What will happen to the housebuilding target now? If it goes by the wayside, what does that mean for the housing market?  Housebuilders remain under pressure. There is no doubt that building one million homes by 2020 was always going to be a challenging target to meet. So if the government’s focus has now changed, which as yet remains unclear, the challenge of meeting this target could become much harder.
 
Even if the government decides to continue with the target, any problems faced by housebuilders is likely to lead to the target being delayed, making it unachievable in the timeframe set.
 
So what does this mean for housing in general, and second charge mortgages in particular? For housing per se it will put even more pressure on the current housing stock as the supply and demand issues remain the same. Regardless of who is in power, the population of the UK is unlikely to ever get any smaller. Instead, it is likely to carry on increasing much as it has done over the past 20 to 30 years. As a result, with no intervention, house prices will continue to rise as the housing stock falls significantly short of what is required.
 
In the short to medium term therefore, we are likely to see much of the same situation as we have seen to date with people choosing to refurbish and expand their existing property instead of moving to a bigger one.
 
While this may not be good news for people wanting to get on the housing ladder, it is likely to be good news for the second charge mortgage market as existing homeowners look for additional finance to enable their home expansions.  
 
The rise in popularity of long-term fixed rates will make second charge mortgages more relevant than ever as the alternative of a remortgage becomes prohibitively expensive if accompanied by a three-year redemption penalty for example.
 
This situation will put brokers in the driving seat as the people best suited to provide their clients with a realistic alternative to moving house. This will be particularly pertinent for those with an expanding family who just cannot afford to move to a larger property.  While some clients will turn to their broker looking for help, others may turn first to their existing lender. As few mainstream lenders also offer second charge loans, this runs the risk of the borrower receiving either limited or poor advice that certainly will not encompass the whole of the market.
 
The Mortgage Credit Directive has gone a significant way to making second charge mortgages a mainstream option. Brokers now have the opportunity to show when second charge mortgages are the best option. This can help the client and potentially save them money.

Attributed to Bradley Moore, director of second charge mortgages at Brightstar.