The Help to Buy equity loan scheme allowed 1,000 sales a week to be completed in 2018, according to the Ministry of Housing, Communities and Local Government.
The ministry’s statistics, published today (February 26), showed Help To Buy equity loans exceeded £10bn for the first time in the third quarter of 2018.
Kate Davies, executive director of the Intermediary Mortgage Lenders Association, said the statistics show that Help to Buy has become a cornerstone of the UK property market.
Ms Davies said the government’s programme continues to stimulate the bottom of the housing ladder, providing essential support to the whole of the UK property sector.
However in Budget 2018, chancellor Philip Hammond announced Help to Buy will come to an end in 2023.
She said: “These figures show a continuing trend in what looks set to be the strongest year so far for Help to Buy sales, with total completions since the scheme began likely to have passed the 200,000 mark by the end of 2018, with around 1,000 sales a week completing with the support of Help to Buy in 2018.
“We expect Help to Buy to remain invaluable in supporting home buyers into the next decade.
“The support will also help keep the property market on an even keel during a period of heightened uncertainty as a result of the UK’s expected departure from the EU this year.
“Given the important role Help to Buy plays in lifting households into home ownership and the large number of people who have not been able to climb onto the first rung of the property ladder, long-term solutions are required to ensure the continuing prosperity of the housing market, post-2023.”
Mark Dyason, managing director of the specialist property broker Thistle Finance, said in an increasingly glacial market, Help to Buy has kept the new build sector afloat and enabled many first time buyers to get on the ladder.
But he warned when it finally comes to an end, the fallout for the biggest developers that have benefited from it the most could be devastating.
Mr Dyason said: “The major property developers have done exceptionally well out of Help to Buy but at some point the supply of the drug will stop and they will have to go cold turkey.
“Help to Buy is in much the same vein as low rates since the Global Financial Crisis. They have kept the economy going but equally they have kicked the can down the road.
“The Help to Buy scheme is arguably a hollow victory with the potential to cause all manner of problems both for the buyers who have used it and the developers that have offered it.
“We live in an era of short-termism but the fall-out from artificial props like Help to Buy could be long-term.”
Source: FT Adviser