A new
report released by HBF illustrates how successful the Government’s Help to
Buy equity loan scheme has been.
The report, released
as Government considers the scheme’s future, shows how it has achieved all the
targets specified at launch (to increase home ownership; increase housing
supply; and generate economic activity).
The report reveals
that:
- 170,000 homes were purchased
through the scheme between April 13 and March 18. Of these more than 4 out
of 5 were bought by first time buyers.
- In total it is estimated it
has enabled some 246k individuals get on to the housing ladder. Despite
claims from critics, the scheme is helping those it was set out to. In
2017 the median household income for those using the scheme was £49,000.
There is no evidence to suggest that the market could support high loan to
value mortgages should the scheme be withdrawn, with just 3.3% of new
lending in Q1 of 2018 at 90% or above.
- Since the scheme launched
housing supply has increased by an unprecedented 74%, the fastest increase
on record, to supply levels last seen in the 1950s. Planning permissions,
a strong indicator of future supply are up 88% over the same period.
- Whilst transactions in the
wider housing market remain subdued (down 21.4% on 2006 levels) activity
in the new build market continues to rise. New builds now account for
almost 15% of mortgaged housing market transactions compared to a long
term average of 8.2%.
- The value of the Government’s
Help to Buy equity loan book has increased significantly – and is still
rising. The report estimates that the £8.9bn the Government invested over
the first five years of the scheme could now be worth £9.8bn, an uplift of
10.5% or as much as £935m.
- The 48,000 homes sold through
Help to Buy last year helped sustain an estimated 150k jobs. On an annual
basis, the additional house building activity is estimated to provide or
fund 20,000 affordable homes; generated £1bn in tax receipts; contributed
£73m towards education vis Section 106 taxes - enough to provide up to
34,000 classroom spaces.
- Unlike previous attempts at
such schemes, Help to Buy has been accessible to builders large and small,
with over 3,000 companies, the vast majority of them small local builders,
now registered.
The report also
demolishes critics’ oft made claim that the scheme has driven up new build
house prices and demonstrates that the respective increase in price between new
builds and second hand homes is remarkably consistent. While new build prices
have always traditionally been slightly higher than second hand properties,
that may not come with new appliances and may require remedial work, the rate
of house price growth for new build properties continues to mirror price rises
in the wider housing market.
Stewart Baseley,
executive chairman of the Home Builders Federation said: “It is quite clear
that the Help to Buy scheme has been an unmitigated success and has delivered
handsomely on all its objectives. It has enabled hundreds of thousands of
people to realise their dream of owning a home, the vast majority of whom are
first time buyers on average incomes. It has led to an unprecedented increase
in house building activity, created tens of thousands of jobs and boosted local
economies the length and breadth of the country.
“Government should
celebrate its success and use the hard evidence now available to rebut the
claims of its critics. As we look to tackle our acute housing crisis and
deliver on the Prime Minister’s target to build 300,000 homes per year the
scheme has a key part to play. Government should reflect on the huge impact the
scheme is having on individuals keen to realise their dreams of home ownership,
on housing supply and on the wider economy.
”Housebuilders
continue to invest in the land, materials and people needed to deliver furthers
increases in supply confident in the demand Help to Buy is underpinning.
Certainty moving forward is now required to enable the increases in housing
supply, and the associated social and economic benefits, to continue.”
