Mixed reaction to Help to Buy results
The latest statistics on the Help to Buy scheme show that in the schemes first six months there were 5,375 properties bought with the support of the Help to Buy: Equity Loan scheme.
The average price of a property bought under the scheme was £194,167, with an average equity loan of £38,703.
Total loans amounted to £208 million with the value of properties sold under the scheme reaching £1.04 billion. 92% of home purchases in the Help to Buy: Equity Loan scheme were made by first time buyers.
Not everyone was quick to call these figures an out-and-out success. Andy Knee, Chief Executive of LMS, expressed concern around the discrepancy between the number and value of equity loans being extended in comparison to the number of affordable homes available.
Mr Knee said: “The number of equity loans in the third quarter of this year (4,200) is 257% higher than the previous quarter (1,175), and the value of these loans is nearly four times as large.
“In the meantime, the number of affordable homes and new build affordable homes available in 2012/13 have decreased by 26% and 25% respectively when compared to 2011/12.
“Publicity surrounding the government’s Help to Buy scheme has helped to lure potential buyers out of the woodwork, but the mortgage market itself will struggle if activity levels continue to rise.
“During the recession many companies made cut-backs, both in terms of staff and expenditure, in reaction to reduced business volumes — and many will be unable to deal with such a sudden upturn in activity.”
Miles Shipside, Rightmove director and housing market analyst said that it was far too early to assess the impact of Help to Buy, with the scheme having challenges, limitations and benefits that are yet to be fully understood.
A survey from Rightmove has shown that there is still confusion over the extension of the scheme to existing properties.
Mr Shipside said: “There is no doubt that Help to Buy has helped raise frustrated movers’ interest and hopes.
“However, our survey draws on a massive sample size of those who stand to benefit most from Help to Buy, so there is more work to be done by Government and industry if one in four of those who are currently hunting for property risk missing out on a leg-up onto the ladder or a welcome shove up to their second home.
“When questioned further about their understanding of the scheme’s detail, knowledge gets even sketchier.”