Government Help

Help to Buy equity loan hit by slowdown

Adam Williams
Written By:
Adam Williams

The number of homes bought under the government’s Help to Buy equity loan scheme has slowed for five successive months, new figures show.

The scheme allows borrowers to buy a new build property using a loan from government. Figures released by the Department for Communities and Local Government showed there were 4,628 completions in the first three months of the year.

This represented the worst figures since the quarter after the scheme originally launched.

Completions were down 17% compared to the start of 2014 and had almost halved compared to the previous quarter.

The average age of a buyer was 31.9 years old and they had an average salary of £33,441, analysis by Mortgage Advice Bureau suggested. This is more than five years younger than a typical buyer.

Andy Frankish, new homes director at Mortgage Advice Bureau, said the drop in the scheme showed more house building was taking place elsewhere.

“The Help to Buy equity loan has been a great success for helping first-time buyers and those with lower incomes get onto the housing ladder,” he said.

“The drop in completions over the last few months at a time when total house building is on the up suggests lenders are putting their weight behind new builds without needing the government incentive. It is certainly positive for the economy that house builders no longer look quite so dependent on Help to Buy to grow the housing stock.

“All the same, it begs the question: would house building rise faster if more can be done through Help to Buy?

“If the scheme was being used to its full capability with better promotion of the scheme on a national level, it would not only help those still struggling to access the housing market but provide a much needed push for house building which is still a great concern and a long way off target.”