Help to Buy fails to address market problems
Figures released by the government showed more than 9,000 properties were sold in the second quarter of the year using the equity loan scheme.
This figure is higher than both the previous quarter and the same period in 2014. Since the launch of the scheme almost 120,000 people have been able to buy a property, with 80% of completions made by first-time buyers.
But the scheme is not addressing structural problems in the property market according to Andy Frankish, new homes director at Mortgage Advice Bureau.
“The government’s Help to Buy equity loan scheme helped a record number of people access the property ladder in Q2, with more than 9,000 completions. This is not only a massive increase on the previous quarter, but is also 3% above the total recorded in Q2 2014,” he said.
“The overwhelming majority of people benefiting from the scheme are first-time buyers, and the price of a Help to Buy equity loan property remains 22% below the average UK house price.
However, Frankish added: “While the equity loan scheme is well ingrained in the sales of new homes, it won’t be around forever. The focus now needs to turn towards more permanent solutions that address the underlying problems affecting housing affordability.
“The issue of supply is a growing concern, particularly as new starts have flatlined in recent months while consumer demand rises. A lack of suitable properties will continue to force prices up, so it’s vital that government initiatives begin to tackle this critical imbalance.”