10,000+ sign up to Help to Buy
Builders have reported strong interim and annual results driven by both reservations and new-build completions founded on the enthusiasm created by both the Funding for Lending and Help to Buy schemes.
Prospective home buyers at new build sites rose by 27% this year thanks to Help to Buy and other government schemes, developer Bellway has reported.
Council of Mortgage Lender figures showed first-time buyer lending hit its highest quarterly total since 2007 yesterday with 68,200 purchasing a first home in Q2 2013.
House building is also at its highest rate since 2008 with 67,422 new homes registered in the UK between January 2013 and the end of June, according to the National House Building Council.
Eric Pickles, secretary of state for Communities and Local Government, said: “This government’s package of measures to boost the housing market is working, with house building and housing supply on the up. The tough decisions we’ve taken to tackle the deficit are now delivering a sustainable increase in housing and providing real help to hard-working people.”
Help to Buy, the equity loan scheme for new-build properties offers a 20% equity loan, interest-free for five years to creditworthy buyers with a value of up to £600,000. The next phase, due to start on 1 January 2014 will run for three years and aims to help a further 74,000 homeowners.
With the second Help to Buy scheme, lenders not builders will be offered government-backed guarantees on loans for buyers with a 5% deposit or more for both new and existing properties.
Ben Thompson, MD Legal & General Mortgage Club, said:
“There can be little doubt that Help to Buy has greatly assisted some of the recovery we have been seeing in the mortgage and housing markets.
“It is somewhat ironic that following five years of these markets being flat, we already have noise about house price bubbles and so on. The recovery has been led by London and the South East in particular, but not exclusively so, and a number of regions have barely had a sniff of recovery since the downturn.
“So the fine balance will be providing sufficient stimulus to ensure the housing market has properly and sustainably recovered, whilst ensuring that housing demand isn’t overly strong relative to supply.”