HBF reports promising help to buy figures
The government’s equity loan scheme help to buy has seen about 4,000 people reserve a new home in its first two months, according to trade body the Home Builders Federation.
About 500 people a week are taking advantage of the scheme and house builders are confident that housing supply will increase ‘significantly’ as a result, the HBF says.
Stewart Baseley, executive chairman at the federation, stated: ‘The large deposits required in recent years to secure a mortgage have prevented many from buying – and as a result, builders from building.
‘The equity loan scheme helps consumers overcome that deposit barrier and as a result the scheme will undoubtedly lead to an increase in house building – already we are seeing companies revise their projected build levels as a direct result of the scheme. This in turn will create jobs and deliver an economic boost.’
The £3.5 billion scheme announced in the Budget in March allows buyers to secure a mortgage with just 5 per cent deposit and grants an equity loan of up to 20 per cent on properties with a value up to £600,000.
Jeff Fairburn, group chief executive of house builder Persimmon, said: ‘Since the introduction of the help to buy measures in April we’ve seen a notable increase in customer interest and visitors to our sites, resulting in a stronger level of sales reservations across England.
‘In response we have increased our build activity to meet this increase in demand. If this early interest is maintained, the help to buy scheme will play an important role in enabling the industry to increase the volume of new homes built over the coming months and years.’
A second part to the scheme is due to come in next January, which will guarantee a portion of lender losses from repossession on 95 per cent mortgages across the UK housing market. This is aimed at stimulating the housing market as a whole and the Treasury expects it to generate about 190,000 sales per year.