Mortgages  

Help to Buy growth undermined by lack of housing stock

Help to Buy growth undermined by lack of housing stock

Latest official figures have put the total value of mortgages supported by the Help to Buy scheme at £5.9bn, but growth in the scheme could be undermined by a lack of available housing stock in some areas, according to separate research from property website Zoopla.

Since the 2013 launch of the Help to Buy, 40,079 mortgages have been completed with its support and 78 per cent were purchases by first time buyers.

The Treasury also stated today (5 March) that the mean value of a property purchased or remortgaged through the scheme was £156,031, compared to a national average house price of £272,000.

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Compared to total mortgage completions in each region, the scheme is supporting a higher proportion of mortgages in the north-west and the east, with a lower proportion in London and the south-east.

However, Zoopla’s analysis suggested that the number of properties on the market eligible for the scheme fell 7.4 per cent in the last year.

The biggest fall in properties eligible for Help to Buy in the past year has been in the east of England, with a 12.3 per cent reduction in suitable stock on the market, while average prices have climbed 6.1 per cent over the same period.

In London, the typical value of a property qualifying for Help to Buy has risen by 11.7 per cent since March last year, Zoopla’s statistics show. For properties for sale in England and Wales, the average price of properties for sale that qualify for Help to Buy has risen 5.5% since March 2014.

Lawrence Hall, head of communications of Zoopla.co.uk, commented that greater demand has not been met by greater supply of homes on the market and instead the soaring price growth of the past year appears to have airlifted many properties out of the starter home zone.

“The pool of homes on the market within reach of Help to Buy assistance needs to expand, or this pinch on supply will continue to inflate prices at the bottom rungs of the ladder.”

The official statistics showed that 66,661 households bought their first home thanks to the scheme, while over half of Help to Buy completions have been for new-build homes.

Separate work by Clydesdale and Yorkshire Banks as part of their first time buyers annual survey also revealed that 46 per cent of first time buyers needed help in saving for their deposit in 2014, down from 63 per cent in 2013 and 78 per cent in 2012.

Steve Fletcher, head of Clydesdale and Yorkshire’s retail network, added: “It is also positive that the number of first time buyers relying on the Bank of Mum and Dad to get on the property ladder has decreased significantly.

“This reflects the increased availability of first time buyer mortgages with a low deposit as well as growing economic confidence particularly among housebuyers.”

peter.walker@ft.com