Help to Buy Results Are In
The results of the first extremely detailed and comprehensive statistical study of the government’s Help to Buy scheme were released last week. The study investigated every area of both the market and the country connected to the Chancellor’s flagship housing initiative.
Help to Buy has received mixed reviews since it was launched ahead of schedule in March, with many economists claiming it is responsible for the housing bubble that seems to be swelling across large areas of the country, particularly London and the South East. The first phase of the scheme, which consisted of an equity loan offering prospective house buyers a loan of up to 20% of the price of a new property as long as they themselves could provide a 5% deposit, came in for less criticism than the more controversial second phase, which has essentially constituted a mortgage guarantee that can be used to buy existing properties since its launch in October 2013.
The recently released report shows that, in total, 27 861 homes have been bought using Help to Buy, with 7 313 of these sales taking place under Phase Two of the scheme. This figure accounts for 3% of entire house sales. It also highlighted the fact that 85 percent of those utilising the scheme were first-time buyers, 74 percent used it to buy houses that were newly constructed, and 94 percent of properties purchased were outside London. The Help to Buy results also show that the average house sale price under both aspects of the scheme was £191 295, well below the national average price, which the Office for National Statistics puts at £252 000.
These results have added to the polarity of the mixed bag of opinions regarding the scheme.
Director of the National Institute of Economic and Social Research Jonathan Portes has criticised the scheme openly and often. Mr Portes argues that the main problem in the British housing market is that less than half the amount of required homes are being constructed each year. This fact is not disputed. Even David Cameron described the Governor of the Bank of England, Mark Carney, as “absolutely right” to point out that the UK housing market had “deep, deep structural problems”. Mr Portes argues that Help to Buy is “a very indirect and inefficient method” of stimulating the building of new homes and the market would be far better served by a system that focussed on providing ‘help to build’ types of intervention such as liberalizing planning and giving incentives to house builders.
On the other side of the fence lie those economic commentators who support the scheme, such as EY Item Club senior economic adviser Martin Beck. Mr Beck believes that Help to Buy has contributed to “a big jump in new homes under construction”.
Unsurprisingly Prime Minister David Cameron is in favour of the scheme. According to Mr Cameron:
“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.”
Only time will tell whether Help to Buy results in positive or negative outcomes for the UK housing market.
If you are looking to sell property and time is something that is not currently on your side, contact quick house sale specialists National Homebuyers. Unlike other companies that buy houses, we undertake a detailed assessment of your property which includes and analyses myriad variables which affect the price of your home, rather than simply judging your house on recent sales of similar properties in your area and offering you a ballpark figure. This allows us to present you with a fast, no obligation valuation that is both detailed and specific to your individual property. We then guarantee to make you a cash offer on your property.
We buy homes for cash and we buy your house directly from you, thus eliminating all the stress connected to being part of a long and complicated property chain. Furthermore we buy any house, regardless of condition or location and irrespective of your circumstances or reason for selling.