Author Topic: Full year Help To Buy Equity loan figures released  (Read 9202 times)

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Full year Help To Buy Equity loan figures released
« on: May 30, 2014, 06:42:56 am »
Help to Buy equity loan figures have been released by the Department for Communities and Local Government.

In the first 12 months (to end March 2014) there were 19,394 properties bought with the support of the Help to Buy equity loan scheme.

The total value of these equity loans was £791 million, with the value of the properties sold under the scheme totalling £3.97 billion.

The average price of a property bought under the scheme was £184,995, with an average equity loan of £36,999.
The report states that the majority of home purchases in the Help to Buy equity loan scheme were made by first time buyers, accounting for 16,964 (87.5%) of total purchases.

With the NewBuy Guarantee scheme, 177 home purchases were made in quarter 1, 2014; this bringing the total number of house purchases up to 5,173 since the launch of the scheme in March 2012.

The housebuilding industry is keen to play down the fact that the scheme is helping fuel yet another house price bubble.  Whilst it can be argues that it is not responsible for double-digit price rises seen in London, it has enabled most of the larger plc house builders to raise their average selling prices by around 20% in the 12 months since Help to Buy became available in April 2013.

This has not gone unnoticed by Mark Carney who recently said that the housing market represented to the greatest threat to the stability of the UK economy. He said that the upturn in the market was too strong, pushing up house prices to make them unaffordable. He suggested that the government might have to scrap its Help to Buy scheme. 

This website agrees.  I would go further and call for a one-off windfall tax levy on the excessive profits builders have generated as a direct result of the Help to Buy scheme, responsible for over 30% of their sales in the last twelve months. The money raised could be used to set up a New Home Ombudsman Service giving new home buyers the opportunity to complain to an independent body who could award proper compensation against both house builders and new home warranty providers for defective new homes and poor service.

Those in the industry do not agree, but then they have a vested interest in keeping their state-subsidised sales, increasing profits and multi-million bonuses rolling in.............
Taylor Wimpey's CEO Pete Redfern said:
"Help to Buy Equity Loan has given more people the confidence and the ability to step onto or move up the housing ladder. It enables us to build more homes on the sites we have already got open, and has given us more confidence to invest in future sites and infrastructure which creates more jobs and economic activity locally."   

Stewart Baseley executive chairman of the Home Builders Federation (the industry's lobbying group) unsurprising added said:
"After a number of years when house building levels fell to a record low level, all indicators show supply is now increasing rapidly.  The Help to Buy Equity Loan scheme is supporting demand for new build homes and if buyers can buy, builders can build. Its extension provides certainty about longer-term demand that will allow the industry to plan ahead, rebuild capacity lost in the downturn and ultimately deliver sustainable increases in supply. This is providing desperately needed homes and also creating tens of thousands of jobs on sites across the country and in the supply chain."

It would seem they are all singing from the same song sheet:  Bubble? what Bubble? 

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