Nationwide’s House Price Index for August, which reported on the impact of the Government loan on the housing market, showed there were around 48,000 completions in England in the 12 months to March 2018.
This was a 21% rise on the same period last year and represented approximately 8% of total house purchase mortgages in England in the period.
Across the country, the statistics showed, the scheme which provides loans towards the deposit on new build homes, accounted for 10% of completions in the North of England 9% in the Midlands.
What’s more, it also emerged the vast majority of Help to Buy Equity loans went to first-time buyers with 80% of borrowers being those new to homeownership.
Robert Gardner, Nationwide’s chief economist, said: “It is unclear how much Help to Buy activity represents additional demand and how much has simply replaced activity that would have already taken place. The scheme has, however, been a key source of demand for newly-built homes in recent years.
“Indeed, Help to Buy, has accounted for more than a third – 37% in the last 12 months – of new build completions in England. This is even higher in some regions, such as the North West, where Help to Buy accounted for nearly half of new build purchases.”
Extending scheme?
It is currently unclear whether the scheme will be extended beyond 21st April 2021 when it is due to expire. However, Gardner said given the long lead time on many housing developments and the need to increase the number homes available it would suggest the scheme would not come to an abrupt end.
Lucy Pendleton, founder director of estate agents James Pendleton, said: “For the number of Help To Buy loans to increase 21% in a year points to the huge additional demand that it has created, propping prices up at a higher level than would have been achieved in its absence.”
Fall in house prices in August
Nationwide’s figures also revealed house prices had risen by 2% in the last year to August and had fallen by 0.5% in the month, which is the biggest monthly decrease since July 2012.
Experts attributed this slowdown, which puts the average UK house price at £214,745, to the fact fewer people were around during the month of August to buy and sell properties.
Jeremy Leaf, north London estate agent and a former Royal Institution of Chartered Surveyors residential chairman, said: “The widely-respected Nationwide figures confirm much of what we have seen on the ground over the last month or so – in other words a market softening a little further in view of the slowing demand over the summer, which was to be expected.
“However, we are seeing no signs of any major changes and in fact over the last few weeks have seen more interest in property again which could well transfer into an increase in sales agreed during September and October.”
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