UK: Help to Buy Scheme Boosts House Building Sector

The Government’s Help to Buy scheme launched in April 2013 has helped boost profits at some of the UK’s leading house builders.

Over the period since the launch of the Help to Buy: Equity Loan scheme (1 April 2013 to 30 September 2018), 195,219 properties were bought with an equity loan. The total value of these equity loans was £10.66 billion, with the value of the properties sold under the scheme totalling £49.89 billion.

Most of the home purchases in the Help to Buy: Equity Loan scheme were made by First Time Buyers, accounting for 158,013 (81 per cent) of total purchases. The mean purchase price of a property bought under the scheme was £255,542, with buyers using a mean equity loan of £54,630.

With a Help to Buy: Equity Loan the Government lends you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest.

You won’t be charged loan fees on the 20% loan for the first five years of owning your home.

Help to Buy Boosts Housing sector

If the home in the example above sold for £210,000, you’d get £168,000 (80%, from your mortgage and the cash deposit) and you’d pay back £42,000 on the loan (20%). You’d need to pay off your mortgage with your share of the money.

For more information (including advice on fees and paying back your loan) please download our Help to Buy buyers’ guide (PDF).

Profits have topped £1bn for the first time at housebuilder Persimmon, which was caught in a pay row last year and is under scrutiny over its continued involvement in the Help to Buy scheme.

Annual profits jumped 13% to £1.091bn, up from £966m in 2017. The firm sold 7,970 homes under the scheme in 2018, up from 7,682 in 2017.