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Help to Buy fails to stimulate new housebuilding boom Help to Buy fails to stimulate new housebuilding boom
(about 9 hours later)
The number of new housing starts has increased by just 7.7 per cent since George Osborne’s Help to Buy policy was introduced, belying government claims that the home buying subsidies have stimulated a significant increase in residential construction.The number of new housing starts has increased by just 7.7 per cent since George Osborne’s Help to Buy policy was introduced, belying government claims that the home buying subsidies have stimulated a significant increase in residential construction.
The Treasury released statistics on Wednesday showing that since the policy was introduced in April 2013, about 113,000 families have been assisted in buying homes, either through mortgage guarantees or equity loans.The Treasury released statistics on Wednesday showing that since the policy was introduced in April 2013, about 113,000 families have been assisted in buying homes, either through mortgage guarantees or equity loans.
The Communities Secretary, Greg Clark, also argued that the policy was “getting Britain building”, claiming private house building was up by more than a third since the launch of the scheme.The Communities Secretary, Greg Clark, also argued that the policy was “getting Britain building”, claiming private house building was up by more than a third since the launch of the scheme.
However, the latest official construction figures, released last month by the Communities department, showed total new housing starts in England were 33,280 in the second quarter of the year, up just 7.7 per cent from the second quarter of 2013 and still well below the average before the financial crisis of 44,000 starts a quarter. On an annual basis, construction starts are running at about 136,000, well below the 250,000 a year needed to meet new demand.However, the latest official construction figures, released last month by the Communities department, showed total new housing starts in England were 33,280 in the second quarter of the year, up just 7.7 per cent from the second quarter of 2013 and still well below the average before the financial crisis of 44,000 starts a quarter. On an annual basis, construction starts are running at about 136,000, well below the 250,000 a year needed to meet new demand.
Help to Buy has been criticised as working as an effective subsidy to the big house building companies, which then fail to construct a sufficient number of homes. The FTSE100 house builder Barratt Developments reported a 45 per cent increase in its pre-tax profits in the year to June to £565.5m. Yet Barratt also revealed that total housing completions for the year were up only 11 per cent to just 16,447 units.Help to Buy has been criticised as working as an effective subsidy to the big house building companies, which then fail to construct a sufficient number of homes. The FTSE100 house builder Barratt Developments reported a 45 per cent increase in its pre-tax profits in the year to June to £565.5m. Yet Barratt also revealed that total housing completions for the year were up only 11 per cent to just 16,447 units.
  
The architect Lord Rogers launched a verbal attack on the big house builders for their failure to build sufficient new homes. “[We must] challenge the monopoly of the big housebuilders, who are making good money through the system as it is, and have no incentive to speed up” he said. The architect Lord Rogers launched a verbal attack on the big house builders for their failure to build sufficient new homes. "[We must] challenge the monopoly of the big housebuilders, who are making good money through the system as it is, and have no incentive to speed up," he said.
Speaking at the launch of his practice’s prefabricated housing scheme in Mitcham, south London, Lord Rogers rejected the argument that the planning system was to blame for the dearth of new supply. “The number of houses with planning permission in London has doubled in the past 10 years, but the pace of development has remained static” he said.Speaking at the launch of his practice’s prefabricated housing scheme in Mitcham, south London, Lord Rogers rejected the argument that the planning system was to blame for the dearth of new supply. “The number of houses with planning permission in London has doubled in the past 10 years, but the pace of development has remained static” he said.
Help to Buy is split into two parts. One element provides equity loans to first-time buyers who purchase newly built homes. The second element offers mortgage guarantees to anyone who has a deposit as low as 5 per cent. Mr Osborne confirmed that the mortgage guarantee element will come to an end in 2016.Help to Buy is split into two parts. One element provides equity loans to first-time buyers who purchase newly built homes. The second element offers mortgage guarantees to anyone who has a deposit as low as 5 per cent. Mr Osborne confirmed that the mortgage guarantee element will come to an end in 2016.
“Supporting people who want to work hard, save and buy their own home is a key part of our long-term plan to provide economic security for working people at every stage of their life, across the UK,” he said. “Help to Buy is also boosting the nation’s economic security by driving an increase in house building in Britain, ensuring long-term housing supply and creating jobs.”“Supporting people who want to work hard, save and buy their own home is a key part of our long-term plan to provide economic security for working people at every stage of their life, across the UK,” he said. “Help to Buy is also boosting the nation’s economic security by driving an increase in house building in Britain, ensuring long-term housing supply and creating jobs.”
Treasury statistics show that the average value of properties bought with a Help to Buy mortgage guarantee was £155,434 and 78 per cent went to first-time buyers. However, the statistics also show that median income of beneficiaries was £40,279 – well above the national average. And 1,541 completions under the scheme were made by families with incomes above £100,000.Treasury statistics show that the average value of properties bought with a Help to Buy mortgage guarantee was £155,434 and 78 per cent went to first-time buyers. However, the statistics also show that median income of beneficiaries was £40,279 – well above the national average. And 1,541 completions under the scheme were made by families with incomes above £100,000.
The latest housing statistics show that quarterly private housing starts were up 15.7 per cent between Q2 2013 and Q2 2015 to 28,110. But this was partly offset by a 22 per cent plunge in housing association construction starts to 4,810 since the scheme began.The latest housing statistics show that quarterly private housing starts were up 15.7 per cent between Q2 2013 and Q2 2015 to 28,110. But this was partly offset by a 22 per cent plunge in housing association construction starts to 4,810 since the scheme began.