The Help to Buy mortgage guarantee scheme has brought housebuilding in the UK forward, according to the latest HM Treasury figures released today show.
Over half of homes bought under the scheme were new-build properties, contributing to the sharpest rise in house building orders since 2003.
Help to Buy has also incentivised growth in the construction industry, which reported a 10 per cent increase in housing starts for last year. Housebuilding numbers are growing for 21 consecutive months now.
The scheme, which was designed with responsible lending in mind, has achieved its goal not be a “material driver of house price growth”.
Today’s figures show that the average house price for both parts of the scheme, at £185,000 (£156,000 for the mortgage guarantee and £212,000 for the equity loan scheme), remains significantly below the national average house price of £272,000.
The average house price to income multiple under the mortgage guarantee scheme is just over 3.5x salary, and capped at a 4.5x ratio to ensure responsible lending.
Stewart Baseley, executive chairman of the Home Builders Federation, commented:
“Help to Buy has helped tens of thousands of people onto the housing ladder who otherwise would have struggled to meet their ambition of home ownership. First time buyers in particular are taking advantage and the scheme is helping people in every part of the country. The resultant rise in demand is allowing builders to increase much needed house building levels. This is turn is creating tens of thousands of jobs and boosting local economies the length and breadth of the country.”
