Help to Buy: first-time buyer prices up £34,000

Updated
bury st edmunds  uk  march 10 ...
bury st edmunds uk march 10 ...



The price of a first-time buyer home has rocketed by almost 19% since the Government's Help to Buy scheme was launched, according to official figures.

The findings suggest the Government initiative has actually driven up house prices and has led to calls for it to be scrapped.

Data from the Office for National Statistics (ONS) shows a typical buyer would have paid £179,000 for their first home in April 2013 (when Help to Buy launched), but this price tag had reached £213,000 by June 2015.

This represents an increase of 18.52% over 26 months. In the same period before Help to Buy house prices had risen by 13.96%, or £22,000.

The Government today revealed its flagship initiative has helped 120,000 buy their new home since it was launched. On the same day, housebuilder Barratt accredited Help to Buy as one of the key reasons behind its 45% jump in profits.

Property buying agent Henry Pryor said there was "little doubt" the scheme was driving up prices, and called on the Government to scrap any further stimulus.

He added: "The question now is 'does the patient still need the medication?'. Looking at the results posted this week by the likes of Barratt the answer must be a loud 'no'.

"There are two ways to help people to buy a home they otherwise can not afford - give them money to pay the prices being asked or wait for the market to adjust and for prices to fall to where they can be afforded.

"Lenders are once again lending, builders are now building. Giving 10 people more money to pay for six properties just means that, as we have seen, people offer more for those limited number of homes. No more people buy. No more homes are built.

"The sight of house builders making huge profits from taxpayer money is obscene and must stop. Turn the Help to Buy tap off and concentrate on providing more builders to build more homes."

Henry Gregg, assistant director of campaigns for the National Housing Federation, added: "The only way we can truly tackle soaring house prices is by building more homes - as a country we are building around half the number we need each year."

Last October, Bank of England governor Mark Carney wrote to the Chancellor to say that the Financial Policy Committee has assessed the Help to Buy mortgage guarantee and that it "did not pose material risks to financial stability".



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