Help to Buy reservations pass 12,500 mark
As Help to Buy reservations passed 12,500 at the end of August, the Home Builders Federation reassured Housing Minister Mark Prisk the scheme is on target to deliver the planned 74,000 homes.
The first phase of Help to Buy launched on 1 April this year with phase two launching next year.
For new-build properties, it offers a 20% equity loan, interest-free for five years to creditworthy buyers up to a value of £600,000.
The next phase, due to start on 1 January 2014 will run for three years and lenders, this time, not builders will be offered government-backed guarantees on loans for buyers with a 5% deposit or more for both new and existing properties.
Mark Clare, chief executive of Barratt said:
“We are now preparing for further growth and have committed £1bn to land investment for new homes and we’re also expanding the business by taking on 600 new apprentices and graduates to tackle the skills shortage.”
Jeff Fairburn, group chief executive of Persimmon confirmed it had also increased build activity following an uptick in reservations and Pete Redfern, chief executive of Taylor Wimpey added:
“It [Help to Buy] enables us to build more homes on the sites we have already got open, and also gives us more confidence about investing in future sites and infrastructure which creates more jobs and economic activity locally.”
The Treasury’s working assumption is that the Guarantee scheme will generate around 190,000 sales per year, equivalent to one fifth of annual UK housing transactions, or 932,000 in 2012.
However, as the market gears up again for Autumn, the HBF said constraints like the planning system and regulatory costs still need to be addressed.
The government called a meeting of key industry participants on 23 July to rally interest in the second Help to Buy phase, although key detail is still under discussion.
The Council of Mortgage Lenders warned the final scheme must be straightforward for lenders to implement and administer given the short timescale available before launch on 1 January.
Director general Paul Smee said the final scheme must have clear success criteria, a clear exit strategy and be accompanied by an equivalent government focus on the supply of new housing to avoid a house price bubble.
Following the meeting, the Council of Mortgage Lenders said that no agreement had been made on the commercial participation fee lenders would be charged nor had any details been finalised on the capital reliefs afforded to banks and building societies.