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Economy

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Currencies

Asia markets tentative ahead of Opec meeting

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Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

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Banks

Barclays: life in the old dog yet

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Categorized | Property

Help to Buy used by almost 40,000 people


Posted on July 31, 2014

©Bloomberg

Nearly 40,000 people have bought a home through the “Help to Buy” programme, ministers announced on Thursday, as they sought to rebuff Labour criticism of the coalition’s housing record.

There were 27,167 properties bought using the Help to Buy equity loan in the scheme’s first 15 months to the end of June, up 4,357 in the past two months. That shared equity programme helps people, mostly first-time buyers, acquiring new-build properties.

    The more controversial mortgage-support element of the programme helped 7,300 people buy a home – either new-build or old – in the same period.

    Brandon Lewis, housing minister, said the figures proved that the scheme was providing assistance to “hard-working families”, while expanding the supply of new homes.

    Housebuilding had climbed to its highest level since 2007 in part because of the momentum created by Help to Buy, he said.

    “It’s no accident that since the start of the scheme private housebuilding has shot up by a third and continues to climb,” he said. “The construction sector has grown for 14 consecutive months, and companies are now taking on new workers at the fastest rate for 17 years.”

    Stewart Baseley, executive chairman of the Home Builders Federation, said Help to Buy had contributed to the steepest increase in new housing starts for 40 years.

    FT Video

    UK government profits from Help to Buy

    File photo dated 28/02/12 of a general view of roof workers building new houses in Derbyshire as Britain's housebuilding recovery spurred the first rise in construction output for seven months in May, raising hopes the sector's slump may be easing. PRESS ASSOCIATION Photo. Issue date: Tuesday June 4, 2013. The fastest increase in housebuilding work for more than two years lifted the closely-watched Markit/CIPS construction purchasing managers' index (PMI) to a reading of 50.8 in May - above the 50 level which separates growth from contraction. See PA story ECONOMY Construction. Photo credit should read: Rui Vieira/PA Wire

    May 2, 2014: FT research has revealed that rising house prices are set to give the UK government a £12.3bn stake in the housing market through its backing for the Help To Buy home ownership scheme. Property correspondent Kate Allen talks to the FT’s Daniel Garrahan about the questions the profit will raise over the government’s attitude to house prices.

    But Alex Hilton, director of Generation Rent, a pressure group, said the programme was not delivering where homes were most needed: “Where there are jobs.” Instead the biggest number of sales had been in Wiltshire, Leeds and Bedfordshire.

    Emma Reynolds, shadow housing minister, said on Thursday that the government had presided over the lowest level of housebuilding since the 1920s.

    “We are not even building half the homes we need to keep up with demand,” she said in a speech.

    The Labour MP warned that on the current trends Britain was heading for a housing gap equivalent to three cities the size of Birmingham: “If the Tory-led government’s record is repeated until 2020 . . . the gap between housing supply and demand under the Tories will have reached 1.3m homes.”

    BBC Newsnight recently obtained a leaked document from the communities department suggesting that housing “starts” were likely to decline in 2014-15. That was because any increase in private housebuilding would be negated by a steep drop-off in new social housing.

    Labour has since asked the department to clarify its expected housing start figures for 2014-15, only to get a reply about an expected rise in “private sector housing starts” – a figure that would ignore social housing.

    Hilary Benn, the shadow communities secretary, has written to Sir Bob Kerslake, permanent secretary at the department, accusing officials of putting forward a “selective and distorted” view of the situation.

    “There seems to be a cover-up going on in which ministers are trying to hide the figures DCLG has in its possession,” he wrote in the letter.

    Mr Lewis retaliated by saying that Labour’s record on housing was “truly appalling” and that the average house price rose from just £58,403 in 1997 to £183,959 by the end of 2007. That was a 214 per cent increase, he pointed out.

    Additional reporting Andy Sharman