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The chief executive of the UK’s largest house builder has called for clarity from the government on Help to Buy after 2021.
In a conference call alongside a trading update for the six months to last December, David Thomas, chief executive of Barratt Developments, said he was hoping the government would indicate its intentions in the next three to six months.
The prime minister announced a £10bn boost to Help to Buy in October last year, despite criticism from some who say it pushes house prices up.
The scheme offers 20% equity loans to buyers of newly built properties worth up to £600,000.
Mr Thomas said: “We are operating with quite extended lead times, so thinking about committing to land to go through planning to get on site. Typically, we could be looking at periods of five or six years from that initial commitment to completing on site, and therefore the sooner the industry receives confirmation about the intentions beyond 2021, the better.
“When you look at what the government has said, they’ve said they recognise that there’s some need to make statements for the period beyond 2021, and we would hope that would happen reasonably soon, certainly over the next three to six months.”
Barratt revealed in the update that it increased its land-buying activities considerably in the past six months.
It reported that it had £641.2m of land approved for purchase in the six months to December 2017, equating to 51 sites and 13,263 plots. This compares to £328.2m of land, consisting of 39 sites and 5,262 plots in the same period in 2016.
This activity, as well as an increase in November dividends paid from £248m to £348m, reduced its net cash from £196.7m to £165m.
The builder’s average selling prices went up by 6.5%, driven partly by a 7.5% rise in the selling prices of affordable housing, from £115.3k to £124,000.
Completions by the house builder rose slightly compared to the same period in 2016 – from 7,180 to 7,324 – and total plots forward sold were up 3.8% to 10,921 plots.