More efforts in order to stimulated the UK’s housing market are made by the British government. Part of the new plans are a mixture of repurposing existing buildings along with more assistance for people to get on the property ladder. Supporting plans such as the Help to Buy and Newbuy plans are supposed to help the market, taking on the problem of record- high housing prices and the reluctance of banks to provide mortgage loans. One aim of those schemes is to provide the market with affordable Loan-to-Value mortgage loans to help younger first-time buyers to be able to get affordable home loans much easier.
Not all of those aimed to be helped with those new plans are seeing the benefits. Only a smaller percentage of the target demographics believe it is now easier for them to get on the UK’s property ladder. However, several industry experts point out that there is more to it and urge to see the whole picture. Mortgage Directors at Halifax, Craig McKinlay said: ‘The assisting government plans we have now are designed specifically to help first-time buyers get on the property ladder in the United Kingdom. With the help of those plans, such as the Newbuy or Help-To-Buy plan, people will be able to realise their ambitions to become homeowners far easier. Likewise, the schemes will also motivate many to look into housebuilding again which will be beneficial for the UK’s housing market as a whole’.
According to Halifax, the positive outlook on the market comes from their own figures and research conducted which shows that the number of first-time buyers as a proportion of all purchases in affordable housing schemes is significantly higher today as compared to the previous years.
‘We are pretty confident that the Help to Buy equity scheme is helping to stimulate demand by making it easier for buyers. This pertains to a wide spectrum of people, not just those buying property for the first time. With the Help to Buy mortgage scheme which will be introduced next year there will furthermore be an incentive for those buyers who are looking to purchase existing properties as well as new homes.’
The study showed that the average purchase price for properties bought under Britain’s affordable housing schemes is £167,955 which is 10% lower below average for such purchases in the United Kingdom. London has still the highest purchasing costs where the average is at £228,560. The study finds the biggest gap between the average price of a home sold under a homeownership scheme and the average price across all transactions is also in London, at 25%. Looking at figures from the previous year, 16% of all affordable housing transactions were in the South East, followed by Scotland where the percentage is at 14%.
The study points out that the price for purchases using the Help to Buy scheme is very slightly below the average first time buyer purchase price. While not a significant difference, the somewhat smaller average nevertheless is an incentive for many to get into the market. This is seen as one factor that explains the increase in numbers of first time buyers as compared to previous years.