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Chancellor announces £600 million boost for housing in the south of England

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House prices in Northern Ireland are showing a continued annual growth of 3.5% compared to the same period last year as according to the recent report released by the Northern Ireland Statistics and Research Agency. Read More...

House prices fall across the South of England despite national growth

15 August 2019

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Report finds that most buyers did not need Help to Buy

Thursday 13 June 2019

The National Audit Office (NAO) report has found that two-thirds of homebuyers who used the Government's Help to Buy scheme could have bought a home without it.

The report, that used figures supplied by the Ministry of Housing, Communities and Local Government showed however, that buyers may not have been able to purchase the house they wanted without the help.

Report statistics

  • More than 8,000 participants had household incomes of over £100,000.
  • The scheme did help boost the profits of building firms
  • Between 2013 and 2018 more than half the sales in England made by Redrow, Bellway, Taylor Wimpey, Barratt and Persimmon involved Help to Buy
  • One fifth of people using the scheme already own property
  • About 38% of all new-build property sales have been supported by the loans
  • The number of new-build properties sold has risen from 61,357 a year to 104,245 a year in 2017-18
  • Only 37% of buyers said they could not have bought a property without the support of Help to Buy

The NAO said it was too early to determine if the scheme had delivered value for money for the taxpayer.

Gareth Davies, head of the NAO, said: "A proportion of participants could have afforded to buy a home without the government's help.

"The scheme has also exposed the Government to significant market risk if property values fall, as well as tying up a significant public financial capacity.

"The government's greatest challenge now is to wean the property market off the scheme with as little impact as possible on its ambition of creating 300,000 homes a year by 2021."

The scheme comes in two forms, Help to Buy loans and Help to Buy Individual Savings Accounts (Isas).

In the first version, the Government lends up to 20% of the cost of a newly built property, or 40% within Greater London, so buyers need only a 5% deposit and a 75% mortgage to buy it.

Those purchasing a new-build home are not charged interest for the first five years.

The Help to Buy ISA was launched later, in December 2015, and is open to first-time buyers in the UK.

Savers receive a 25% bonus from the government when they withdraw the money they have saved to buy their first property. The maximum purchase price is £250,000, or £450,000 in London.

The maximum government bonus that someone can receive is £3,000, if they have saved £12,000.

From 30 November 2019, new applicants will no longer be able to apply for the Help to Buy ISA. Existing customers will benefit from the 25% Government subsidy until 30 November 2029.

"By 2023, the government will have invested up to £29bn in the scheme, tying up cash which cannot be used elsewhere," the NAO said.

Persimmon is the biggest beneficiary, with almost 15% of the sales made under the Help to Buy Scheme.

From April 2021, the scheme will be restricted just to first-time buyers.

Propertymark resources

Propertymark has a range of guides for NAEA Propertymark clients to discover which provide important information in an easy-to-read format. Members can direct their customers to the Advice and Guides section of the Propertymark website. Guides include:

  • Video on 6 top tips to help first time buyers get on the property ladder
  • Speeding Up Your Property Purchase or Sale guide
  • Help to Buy – What You Need to Know guide
  • How to Make an Offer on Your Dream Home guide