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Has Help to Buy been a help or a hindrance?
LONDON, 3rd April 2014 – As the first anniversary of Help to Buy arrived earlier this week, JLL looks at the effect this Government incentive scheme has had on the UK housing market.
Adam Challis, Head of Residential Research at JLL comments: “It is clear that the Help to Buy scheme has been a success story for Government. Not only has it enabled 17,000 purchasers (15,000 new build) to access home ownership across the UK, it has generated nearly 50,000 construction jobs.
While Help to Buy has remained controversial for many, it is a good example of Government providing a practical solution to kick-start a stalling market. We must remember that the UK housing market had entered its sixth year of flat or declining prices, with transaction levels at barely half the level of a normal market. Our research shows that the impact of Help to Buy has been nationwide, with the biggest take up of equity loans seen in the East of England.
The impact on price growth has also been universally positive across all regions in the UK, with every area seeing an increase in house price growth since the scheme was introduced. However, it is important to note that prices in many parts of the UK remain below previous peak levels and are still in recovery mode.
Challis goes on to comment: “There remain mislaid concerns that Help to Buy is stoking up house price inflation. While an important boost to activity and to sentiment, it represents a tiny fraction of the over 1,000,000 transactions that took place in 2013.”
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