Data released by the government this week shows that more than 48,000 home buyers have used Help to Buy to get a leg up onto the housing ladder. Some 30,000 have used the Help to Buy Equity Loan scheme, aimed solely at those buying new homes, while around 18,500 have used the mortgage guarantee.
Whatever the views on Help to Buy, and the government’s intervention in the housing market via this scheme, there is no doubt that it is having an impact on development volumes, according to data prepared for real estate firm Knight Frank by property industry analysts Glenigan.
Redrow is the latest house builder to show that sales via Help to Buy have accounted for a notable proportion of transactions over the last year, in this case around 35%. The uncorking of latent demand for housing through Help to Buy has also helped boost confidence around lifting development volumes.
A recent Knight Frank survey of the house building industry showed that the extension of the Help to Buy Equity Loan to 2020 was encouraging developers to undertake larger and longer term development projects.
The latest planning data, which shows the number of private and social homes for which detailed planning has been approved in schemes of 10 units or more, highlights that developers are undertaking more work.
This is reflected in record high construction activity, as reported by Markit/CIPS this week. It shows that around 190,000 units received detailed planning in the year to July, up from 135,000 in the same period two years ago.
The planning rules are no doubt also playing a part in the surge in planning applications, as under the relatively recently introduced National Planning Policy Framework, developments can be approved where a local authority cannot prove it has five years’ worth of housing supply. This is the case for many local authorities.
There is still some way to go however as around 250,000 new homes are needed every year in the UK. In the last financial year, fewer than 140,000 were completed.
