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Fears growing around ‘over reliance’ on Help to Buy

Some areas of England are becoming so reliant on Help to Buy there are fears they could face problems when the scheme ends in 2023.

New research by modular homes developer, Project Etopia, revealed in Northampton 97% of new build sales were sold under the Help to Buy: Equity Loan scheme last year.

Other areas with a high percentage of new builds sold through Help to Buy included Burnley, Derby, Warrington and Bedford, according to the study.

Across the country more than half of new-build property purchases were funded by the government-backed scheme aimed at helping more people, particularly first-time buyers, on to the property ladder.

Project Etopia said this heavy reliance on the scheme, which was used in conjunction with 52,000 of the 100,000 new build purchases in 2018, reinforced concerns that when it is axed the housing market will be dealt a serious blow.


But it also feared the problem could be more acute in the ‘hotspots’ it identified with the highest uptake of the scheme, such as Northampton.

Joseph Daniels, CEO of Project Etopia, said: “Building more homes is the long-term solution to the housing crisis, not a free leg up. This startling research shows just how far Help to Buy is underpinning and driving the new-build market across the whole of England.

“There is a danger that, once the scheme ends, the rug could be pulled out from beneath those areas that have come to rely on Help to Buy to too great a degree. This study gives us an early indication of which markets will be most resilient.”

Project Etopia said the reliance on Help to Buy was more severe in the country’s towns and cities, with just over 54% of new build sales in these area funded by the government scheme.

The research found the highest number of Help to Buy new builds were sold in Wakefield, West Yorkshire, where 740 transactions took place under the scheme. Meanwhile, the lowest was in Eastbourne, East Sussex, where just one new build was sold through Help to Buy in 2018.

The location which was least reliant on Help to Buy was Cambridge where just 17.7% of new builds were bought through the initiative.

(Source: Project Etopia):

Name Total transactions 2018 Total HTB 2018 % New Builds sold with HTB
Northampton 241 234 97.1%
Burnley 102 95 93.1%
Derby 198 183 92.4%
Warrington 128 117 91.4%
Bedford 620 557 89.8%
Watford 60 52 86.7%
Harlow 152 130 85.5%
Wolverhampton 249 212 85.1%
Gosport 13 11 84.6%
Grimsby 104 84 80.8%

By Kate Saines

Source: Mortgage Finance Gazette