Housing and Planning Minister Brandon Lewis said that the new figures show how the scheme is boosting the supply of new homes, with over 32,500 households buying new build homes through the equity loan and NewBuy options, with a further 7,300 sales though the mortgage guarantee.
He also said that the figures were further evidence that Help to Buy was doing exactly what it was designed to achieve: providing assistance to families while expanding and accelerating the supply of new homes.
Over 80% of sales have gone to first time buyers and been for new build homes. The direct result is, according to Lewis, a new generation of homeowners and a 34% increase in private house building during the first year of the scheme.
House building has climbed to the highest level since 2007, while developers have pledged to use the momentum created by Help to Buy to continue increasing their output. The construction sector has grown for 14 consecutive months, and companies are now taking on new workers at the fastest rate for 17 years.
Lewis said the government had expanded the range of available data about Help to Buy and the latest figures include, for the first time, sales data broken down by postcode, so communities, builders and businesses can see exactly how the scheme is benefitting their area.
‘Almost 40,000 households have now achieved their dream of becoming home owners through Help to Buy. Hard working families are getting the homes they want, while house building has increased to its highest level since 2007,’ said Lewis.
‘It’s no accident that since the start of the scheme private house building has shot up by a third and continues to climb. Developers are increasing their output, and taking on new workers at the fastest rate since records began,’ he explained.
‘And for the first time, we’re publishing post code level data about the scheme, so communities can see exactly how this vital part of our long term economic plan is improving the housing market and helping their area,’ he added.
The data shows that sales of new build homes have been strong across the country. The highest number of equity loan sales were in Wiltshire with 469, Leeds with 457 and central Bedfordshire with 427. Milton Keynes, Peterborough, Bradford, Manchester, Country Durham, Bedford, and Birmingham have all achieved over 300 sales.
The average price of a home is far below the national average at £208,000 under the equity loan and £151,000 under the mortgage guarantee.
According to David Newnes, director of Your Move and Reeds Rains owned by LSL Property Services PLC, said that Help to Buy has boosted confidence and with it demand among first timers who have been carefully saving up for their deposit, adding that lenders have been more willing to lend to higher loan to value borrowers.
‘The Bank of Mum and Dad is still a very important helping hand onto the housing ladder for first time buyers. It will remain important if interest rates begin to rise and repayments get more expensive. Borrowers will look to increase the size of their deposit, with the backing of their parents, in order to access cheaper rates initially and reduce their monthly repayments,’ he said.
‘However, it’s still crucial that the government continues to support those aspiring home owners who don’t necessarily have the financial support from parents or other family members for their deposit,’ he added.
He also pointed out that the new loan to income caps could have a stifling effect on the first time buyer market. ‘They have understandably been designed to prevent too much risky lending to borrowers with smaller deposits, but they need careful interpretation to ensure they do not cut good buyers with realistic and very affordable borrowing expectations out of the market,’ he pointed out.
‘First time buyers in London are already waiting longer to get onto the ladder. Introducing loan to income caps won’t significantly dent demand for property in London but it will make it even more difficult for London first time buyers to get onto the property ladder. MMR regulations already stress test borrowers’ ability to withstand a base rate rise. The further regulation could sap the energy at the bottom of the market,’ he concluded.
