Help to Buy Sparks Housebuilding
Highest number of new homes started in Q3 since crash.
Figures released today by CLG show how the Government’s Help to Buy Equity Loan scheme is driving new home building activity. There were 28,580 new homes started by private house builders in England in the July, August and September quarter this year – up 29% on the same period last year. It is the highest number of new homes started in a quarter since Q1 2008.
The figures show confidence is returning to the house building industry aided by the launch of the Help to Buy Equity Loan scheme in April. The biggest constraint on supply since 2008 has been people’s inability to buy. The Equity Loan scheme is delivering around 2,500 new home reservations a month enabling builders to ramp up production on site. Since April it has resulted in over 18000 reservations, mostly to First-Time Buyers.
Builders are building out existing sites more quickly and looking to start on new sites sooner.
Speaking today, Stewart Baseley, Executive Chairman of the HBF, said; “Help to Buy is increasing demand for new homes and the industry is responding. People’s inability to buy in recent years has been the biggest constraint on the industry’s efforts to build more homes. If people can buy, builders will build. Help to Buy is allowing people who can afford to buy a home to do so, meaning builders can get on with building the homes the country needs.”
“As a result of this increase in activity, the industry is recruiting significant amounts of people. The supply chain is also gearing up to meet the increased level of demand, generating an economic boost the length and breadth of the country”
Jeff Fairburn Chief Executive of Persimmon said:
“The Equity Loan element of Help to Buy is already having a meaningful impact on the housing market, by addressing the issues of restricted mortgage availability and large deposits that were preventing many potential homeowners from buying a home of their own. To increase volume to meet this increased demand, we are stepping up our investment in land and construction, opening 85 new sites before the end of the year and developing on all sites where we have implementable planning consents, creating many new jobs in the process.
“The forthcoming Mortgage Guarantee element will address the same issues in the much larger market for second hand homes and the anticipated increased activity in the wider housing market should also provide a further boost to market confidence and volumes in the new build sector.”
Pete Redfern, Chief Executive of Taylor Wimpey said:
It enables us to build more homes on the sites we have already got open, and also gives us more confidence about investing in future sites and infrastructure which creates more jobs and economic activity locally.
Mark Clare, Chief Executive of Barratt said:
“Customer interest in the Help to Buy scheme has been very strong as it has successfully addressed the issue of lack mortgage finance at higher loan to values. Interest has been particularly encouraging from customers previously locked out of the market by high deposit requirements.
“If we can sell homes more quickly we can build more quickly and we are rapidly increasing production. We now have the confidence to target the construction of 45,000 homes over the next three years and we are investing in land and bringing it through planning to meet increased demand. We are also expanding the business by taking on 600 new apprentices and graduates to tackle the skills shortage that could constrain future growth.”
Jim Wren, Chief Executive of Strata Homes said;
“Strata are pleased to report a significant upturn in sales numbers as a result of increased customer confidence, improved lending arrangements and particularly the introduction of the Government backed Help to Buy Equity Loan Scheme. We are confident of this increased demand continuing and have accelerated our build rates accordingly.”
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Notes to editors
The Home Builders Federation (HBF) is the representative body of the home building industry in England and Wales. The HBF’s member firms account for some 80% of all new homes built in England and Wales in any one year, and include companies of all sizes, ranging from multi-national, household names through regionally based businesses to small local companies: www.hbf.co.uk Help to Buy Equity Loan figures: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/260034/HelptoBuy_and_NewBuy.pdf.