Wednesday, September 24, 2014
Homebuyers stay local with Help to Buy boost
• Help to Buyis delivering more local affordable housing to first time buyers. 85% of those purchasing through the Help to Buy Equity Loan scheme are first time buyers
• Overall, 50% of those purchasing through the scheme are able to remain within the same town compared to 37% of all first time buyers
• 84% of all Help to Buy loans have come from outside London and the South East. Of these, 60% come from the Private Rented Sector and 40% from the family home
Help to Buy is enabling more homebuyers to reside within their immediate area, with 50% buying through the scheme able to remain within the same town compared to 37% of all first time buyers, according to new research from Countrywide Land & New Homes, the UK’s largest new homes agency. Further still, 71% were able to stay within the same local authority compared to 62% of other first time buyers.
The New Build Development, Demand and Supply Report, which includes exclusive data available from Countrywide, has also found that overallHelp to Buy has been most effective in driving home ownership in the Midlands and the North of England, with 84% of all loans coming from outside London and the South East.
Underpinning this retention of local people is the affordability of the scheme. For every £1 spent on repayments by a home buyer with a 95% LTV mortgage, a buyer using the Equity Loan scheme spends just 73p by comparison.
However, the report highlights that affordability in London and the South is much more constrained, with just 40% of first time buyers using Help to Buy staying within the same local authority, compared to just 33% of all first time buyers. Overall, home buyers must move nearly twice as far as their northern counterparts – an average of three miles.
The research also found that the scheme has been particularly effective getting people onto the property ladder with 85% of those buying through the Equity Loan Scheme for the first time. Of these, 60% come from the Private Rented Sector and 40% from the family home.
James Poynor, Managing Director of Countrywide Land & New Homes commented:
“The findings of our report highlight the broadly positive effect Help to Buy has had on property demand, particularly in the North of England.The scheme has enabled more young people to stay within their local area, reversing a trend which has seen first time buyers having to move further away to get onto the property ladder.
“However, in the South,new buyers tend to move further with infrastructure and affordability, rather than town or increasingly arbitrary local authority boundaries governing where new buyers can purchase.
“The scheme has undoubtedly had an overwhelmingly positive effect in driving demand and providing more people choice of housing tenure in their local area. We look forward to Government further supportinghousebuildersin delivering new homes where crucially the differing approaches to planning on a local level can often restrict a builder’s ability to provide much-needed housing.”
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