There are fears Help to Buy could become a victim of its own success after it emerged there were areas where the scheme was funding as many as 97% of new build sales.
Data published today by Project Etopia, a modular homes developer, said it was concerned certain housing markets were becoming too reliant on the government-backed initiative and would face problems when it ended in 2023.
Help to Buy: Equity Loan was launched in 2013 as a way to help more people, especially first-time buyers, onto the property ladder. It provides buyers purchasing a new-build home with a loan for up to 20% of the value of the property, or 40% for homes in London.
But changes introduced by the Government mean that from 2021, only first-time buyers will be able to benefit, and in 2023 Help to Buy: Equity Loan will be axed.
In 2018 alone, 52,000 home purchases were completed through the scheme, which represents just over half of the new builds which were bought that year in England.
But Project Etopia’s research shows there are certain areas where the proportion of new builds bought through Help to Buy was much higher. And these areas will face more acute problems when the scheme finishes.
Areas affected
According to the research, Northampton has the highest proportion of new builds sold under the Help to Buy Equity Loan scheme. In fact 97% of new builds went to customers using the initiative.
Other areas with a high percentage of new builds sold through Help to Buy included Burnley, Derby, Warrington and Bedford, according to the study.
Joseph Daniels, CEO of Project Etopia, said: “This startling research shows just how far Help to Buy is underpinning and driving the new-build market across the whole of England.
“There is a danger that, once the scheme ends, the rug could be pulled out from beneath those areas that have come to rely on Help to Buy to too great a degree. This study gives us an early indication of which markets will be most resilient.”
According to the research, the highest number of Help to Buy new builds were sold in Wakefield, West Yorkshire, where 740 transactions took place under the scheme. Meanwhile, the lowest was in Eastbourne, East Sussex, where just one new build was sold through Help to Buy in 2018.
The location which was least reliant on Help to Buy was Cambridge where just 17.7% of new builds were bought through the initiative.
Help to Buy (HTB) Transactions in 2018 (Source: Project Etopia):
| Name | Total transactions 2018 | Total HTB 2018 | % New Builds sold with HTB |
| Northampton | 241 | 234 | 97.1% |
| Burnley | 102 | 95 | 93.1% |
| Derby | 198 | 183 | 92.4% |
| Warrington | 128 | 117 | 91.4% |
| Bedford | 620 | 557 | 89.8% |
| Watford | 60 | 52 | 86.7% |
| Harlow | 152 | 130 | 85.5% |
| Wolverhampton | 249 | 212 | 85.1% |
| Gosport | 13 | 11 | 84.6% |
| Grimsby | 104 | 84 | 80.8% |
