Help to Buy dominates acquisitions, survey finds

The government’s Help to Buy scheme is being used to such a degree in some parts of the country that it funds nearly all new-build home purchases in those areas.

Research conducted by modular homes manufacturer Project Etopia found that in Northampton 97% of all new home acquisitions in 2018 – some 241 purchases – relied on HTB financing.

Such is the reliance on the scheme that there are fears some housebuilders will suffer from sluggish sales once the scheme is wound down in 2023.

While Northampton led the league for the highest proportion of HTB sales, Bedford saw 90% of the town’s 620 new-build transactions use the scheme, while in Wolverhampton it was 85%, equating to 212 purchases.

Help to Buy is due to end in 2023, although last year the chancellor of the exchequer, Philip Hammond, introduced limits on how it could be used, restricting it to first-time buyers.

Hammond also instigated another tweak to the system, requiring regional caps that mean it can only be used for properties worth 1.5 times the value of the average first-time-buyer property in any given region.

Cambridge was ranked as the location where HTB was used the least to acquire a new-build home, at nearly 18%, followed by Portsmouth (20%) and Norwich (23%).

Joseph Daniels, Project Etopia’s chief executive, said of his firm’s research: “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.”

Daniels said the study showed which markets would be most resilient when the scheme comes to an end in four years’ time.

Project Etopia also announced the appointment of Andrew Southern as the firm’s chief real estate officer.

Southern, who joins the Project Etopia board, is founder of residential developer Southern Grove, and student accommodation outfit Future Generation.