The Housing Market – The Impact and Effect of Help to Buy

August 14, 2019

New research has identified local authority areas across the UK which will be potentially worst hit by the planned changes to Government legislation on Help To Buy in 2021, and when it is projected to end in 2023.

Four North West regional authorities are identified which includes Warrington, Knowsley, Tameside, Wirral and Hyndburn who are among 24 UK locations which are forecasted to be worst hit if the scheme ends in 2023 under the current initiative.

The data looks at a wide range of key issues set to impact the UK residential market.

The Help to Buy scheme was first announced in 2013 as a package of measures to support first-time buyers (FTBs) as well as others seeking to move house. Since its introduction, the equity loan scheme element alone has helped more than 225,000 buyers purchase new homes with transaction values exceeding a reported £60bn.

Its popularity has risen year-on-year from its introduction in the second quarter of 2013, when 2,103 loans were issued, to the last quarter of 2018, when approximately 15,600 loans were distributed. In the final quarter of 2018, the report highlights that 63% of all new home buyers in England used the Help to Buy equity loan scheme.

From 2021, the scheme will be subject to regional maximum value caps and will also be unavailable to non-FTBs.  The report also predicts that the caps will create ‘cliff edges’ in areas straddling regions with relative high and low caps.

The implications are of course more far reaching according to Andy Taylorson at Eckersley on review of the report and could impact on the number of new house sales in the region and as a consequence the volume of houses under construction, as housing developers respond to changes in their customer market. “House Builders have done well with Help to Buy initiative, as it has fuelled buyer demand which has positive effects for the construction industry all the way through the sector from the civils; building materials supply and on the contract side. We have seen high levels of demand for sites with planning permission and the strategic sites coming through the system that offer scope and potential to satisfy raising demand and also to meet the Government s housing delivery targets”.

The spike in activity reported is also confirmed by Mark Clarkson, a fellow director at Eckersley “We have seen, and continue to see, good demand with land sales continuing on both unconditional and conditional terms. We continue to work with landowners on a range of other projects. One of the main hurdles is the planning system, with applications being log jammed in the system, as Local Authorities struggle to process the applications within the statutory time periods”.

Eckersley offer a dedicated team of experienced personnel who specialise in development projects including providing advice on development prospects, viability, terms and conditions of sale and expert valuations. Clients include private landowners, housebuilders, land promoters, statutory authorities, higher education authorities and local councils. For further information contact Andy Taylorson (at@ecersleyproperty.co.uk) or Mark Clarkson (mac@eckersleyproperty.co.uk).