Filling the £105bn Housing Market Hole Left by Help-To-Buy

As the final Help to Buy deadline approaches, the scheme has so far helped over 375,000 homebuyers get a foot on the ladder, with £23.7bn in loans issued helping facilitate the purchase of £105.4bn worth of property.

While Help to Buy closed its doors to new applicants in October of last year, the final deadline for buyers to complete in order to qualify for the loan falls on the 31st of this month, although extensions are available in some circumstances.

Analysis has been conducted, using government data, on the impact of Help to Buy since its launch in 2013, how many homebuyers have benefited and where it has had the biggest impact.

The research shows that the original Help to Buy scheme helped 330,710 homebuyers onto the housing ladder between its launch in 2013 and 2021.

It was then restricted to first-time buyers and by 2022 had helped a further 44,944 buyers onto the ladder in its new guise.

In total, 375,654 transactions have been completed via the Help to Buy scheme, with the total value of equity loans issued totalling £23.6bn and over £10.3bn worth of property purchased.

The scheme has had the biggest impact in the South East, with the region accounting for 18.1% of total Help to Buy transactions, while buyers in the East of England (13.2%), North West (11.6%), South West (11.3%) and East Midlands (10.9%) have also seen some of the biggest benefit.

With the scheme now ending, the nation’s homebuyers are forced to look elsewhere for a helping hand onto the property ladder.

The good news is that there are alternative government buying schemes available including The Mortgage Guarantee Scheme, Shared Ownership, Deposit Unlock and First Homes Scheme, as well as alternative methods to help climb the property ladder such as Gradual Homeownership.

However, previous research by Wayhome has found that while demand is high, the level of for sale stock offering the additional aid of a government buying scheme in the current market is low.

The research found that a third of all properties (33%) listed for sale with the benefit of a government buying scheme across Britain have already been snapped up by eager buyers.

But the 13,066 homes currently listed for sale and offering this additional help account for just 2.2% of total property market for sale stock.

Co-founder and CEO of Wayhome, Nigel Purves, commented:

“Regardless of your personal opinion, there’s no denying that the Help to Buy scheme has helped a phenomenal number of homebuyers onto the ladder who may otherwise have failed to make the jump from the rental sector.

At its peak, it helped facilitate over 50,000 transactions a year and in 2021, it helped 25,000 first-time buyers alone.

With the scheme now closing its door, it leaves a sizable hole within the market, at a time when the financial obstacle to homeownership has never been greater.

The private sector is helping to plug the gap to a degree but as our research shows, with around 13,000 homes offering the aid of a government buying scheme in the current market, along with additional avenues such as Gradual Homeownership, we simply can’t do it alone.

The onus is now on the government to find a solution and some may argue that it’s their duty given the fact that their failure to build enough homes is one of the key contributing factors to spiralling house prices.”

Data on Help to Buy sourced from Gov UK – Help to Buy (equity loan scheme): data to 30 September 2022