Andy Frankish, New Homes Director at Mortgage Advice Bureau (MAB), comments:
“Overseeing a portfolio of loans may be new territory for government, but the status quo was getting us nowhere fast in terms of improving the production rate of new homes. It will take new and innovative thinking to solve the housing crisis and bridge the gulf between supply and demand, so it is vital we build on the platform offered by Help to Buy equity loans and make the most of the momentum in the new homes sector.
“Help to Buy 1 has been most effective in the North and Midlands, so moves to tailor its influence to support all regional housing markets should certainly be encouraged. The supply crisis is most severe in the South, and Mortgage Advice Bureau’s own analysis suggests the scheme has visibly helped to slow the rate of inflation on new build homes¹.
“The benefits of Help to Buy equity loans extend far beyond the 13,000 homebuyers who took advantage of their availability during the first nine months. By confirming its support for the scheme until 2020, the government has given a huge injection of confidence to the construction industry, as well as boosting the number of first time buyers who can ultimately draw on this support to access the property ladder.
“It has put developers in a position to cast off their doubts and focus on increasing production with a steady supply of buyers on the cards. The UK is dominated by large volume developers and they have needed to get their house-building machines going again in order to start increasing volume. The top five developers have all committed to significant increases in the number of houses they will build over the next three years, and the knock-on effect in terms of investment in materials and labour looks set to deliver a major boost to the wider UK economy.”