Bringing Home ownership Back into reach

ASSESSING THE HELP TO BUY EQUITY LOAN SCHEME AFTER FIVE YEARS

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 There is no evidence to suggest that the market could support high loan to value mortgages should the scheme be withdrawn, with just 3.3% of new lending in Q1 of 2018 at 90% or above.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.