Reservations under the Government’s Help to Buy scheme have hit 12,500, with major house builders confident the scheme will deliver its target of 74,000 reservations over the next few years.
The Home Builders Federation reports that 12,500 reservations were made through Help to Buy up to the end of August. The Government is targeting 74,000 reservations over the scheme’s three year term.
Major housebuilders told housing minister Mark Prisk at a meeting last week the first part of Help to Buy was on track to hit its three-year target.
Under the first part of Help to Buy, applicable to new homes worth up to £600,000, buyers put down a 5 per cent deposit and receive a 20 per cent Government equity loan, which is interest-free for five years.
The second element of Help to Buy, set to launch in January, is a £130bn mortgage indemnity scheme for new and existing homes.
Home Builders Federation executive chairman Stewart Baseley says: “Help to Buy has been an unqualified success. However if it is to ultimately lead to a significant and sustained increase in housing supply, ministers still need to act on the other constraints on supply – a lack of land and excessive regulatory costs.”
Chadney Bulgin mortgage partner Jonathan Clark says: “Help to Buy is obviously fuelling demand for new build but I worry about the artificial spike in house prices that is being created. A target of 74,000 reservations is barely scratching the surface in terms of the number of new homes the UK actually needs.”