Help to Buy: opening up home ownership and boosting housing supply
30 May 2014 10:37 AM
New data shows that more than 27,000 people
across the country have bought a new home through the Help to Buy
scheme.
New
stats out yesterday show how Help to
Buy is opening up home ownership to thousands and supporting the
government’s long term plan to help hardworking people secure a better
future for their families.
In
total 27,861 households have been helped by the scheme, which continues to
overwhelmingly benefit first-time buyers, with the vast majority of sales
outside of London and at prices well below the national
average.
Help to Buy is also helping to increase housing supply,
with the scheme driving demand for new-build homes. 74% of the homes bought
through Help to Buy are new-build properties and we are seeing encouraging
progress in the number of homes being built. Private house building is up 34%
since the launch of Help to Buy and leading builders credit the scheme for
reinvigorating the house building industry and boosting housing
supply.
Find out more about the Help to Buy
scheme and how you could benefit.
First-time buyers
Yesterday’s figures reveal that 85% of Help to Buy
sales are to first-time buyers, showing how although Help to Buy accounts for
only a small percentage of overall house sales (recent estimates suggest less
than 3%), the scheme is continuing to successfully target the people who need a
helping hand to get on the housing ladder.
Responsible lending
Help to Buy is supporting responsible lending, with the
average house price for the combined schemes at £191,295, or
£151,597 for mortgage guarantee and £204,805 under the equity loan
scheme – all of which are well below the UK average house price of
£252,000.
The
average house price to income multiple under the mortgage guarantee scheme is
just over 3x salary.
See
a summary of the key
stats on Flickr.
Success across the country
The
figures also show how Help to Buy is benefiting every region of the country,
with the North West as the highest region for the Mortgage Guarantee, while the
Equity Loan - the scheme for new-build properties– at its highest in the
South East. Over 94% of completions under the scheme remain outside
London.
Figures for the mortgage
guarantee scheme also show completions have been least concentrated in
regions where house price growth is highest, for instance in London the scheme
makes up just 0.6% of all mortgage lending compared to an average of 1.3%
across the country.
View quarterly data on the Mortgage Guarantee
scheme and monthly statistics on the Equity Loan scheme.
The
Prime Minister said:
As
Britons, home ownership is in our blood - it’s about aspiration, planning
for the future and laying down roots.
But
we inherited a situation where for many people, buying a home seemed all but
impossible - people who worked hard, had good jobs and could afford the monthly
mortgage payments, but didn’t have the large deposit needed up front. For
those without rich parents, the dream of home ownership remained just that: a
dream. That is why we brought in Help to Buy.
Today, Help to Buy has helped thousands of hardworking
people to buy a new home and crucially it is helping to increase the number of
new homes being built around the country.
It
is an important part of our long term plan to back those who want to get on and
to secure a better future for Britain.
House builders have also welcomed the role Help to Buy
has played in boosting supply. Home Builders Federation Executive Chairman
Stewart Baseley said:
After a number of years when house building levels fell
to a record low level, all indicators show supply is now increasing
rapidly.
The
Help to Buy Equity Loan scheme is supporting demand for new build homes - and
if buyers can buy, builders can build. Its extension provides certainty about
longer–term demand that will allow the industry to plan ahead, rebuild
capacity lost in the downturn and ultimately deliver sustainable increases in
supply.
This is providing desperately needed homes and also
creating tens of thousands of jobs on sites across the country and in the
supply chain.
The
Prime Minister welcomed the news on a visit to a construction site in Ilkeston
in Derby, where Taylor Wimpey is building around 280 new homes, with many being
bought through Help to Buy since it was introduced.
Britain’s construction projects are helping create
jobs and growth. Find out how we are #BuildingBritain.
Pete Redfern, CEO of Taylor Wimpey
said:
Help to Buy Equity Loan has given more people the
confidence and the ability to step onto or move up the housing ladder. It
enables us to build more homes on the sites we have already got open, and has
given us more confidence to invest in future sites and infrastructure which
creates more jobs and economic activity locally.
Markit have also noted the boost to house building since
Help to Buy was introduced. Chris Williamson, Chief Economist,
Markit:
Since the Help to Buy scheme was announced, the
construction PMI survey conducted by Markit on behalf of CIPS has shown the
strongest period of continuous house building growth for 14
years.
Confidence about the year ahead in the construction
industry as a whole surged higher last summer, attributed by many companies to
the various policy initiatives that have been put in place, including Help to
Buy, Funding for Lending and the Bank of England’s ‘forward
guidance’. The latest survey data shows confidence remaining close to
record highs in April, suggesting the sector will continue to boom as we move
through the summer.
Notes to editors
The
Help to Buy Equity Loan enables people to buy a newly-built home with a deposit
of at least 5% of the property price, while the government offers a loan of up
to 20%. The rest is covered by a mortgage.
Meanwhile, the Mortgage Guarantee offers mortgage
lenders the option to purchase a guarantee on mortgages where a borrower has a
deposit of between 5% and 20%. Because of this support, participating lenders
are able to offer more mortgage products to borrowers with small
deposits.
The
Help to Buy Equity Loan scheme, the part of the scheme for new-build homes, has
been extended up to March 2020 with a further £6 billion – meaning
the scheme will support the construction of up to 200,000 new
homes.
Mortgage Guarantee
data is for October 2013 to end March 2014.
Equity Loan data is for April 2013 to end April
2014.