UK’s Housing Scheme Shows Promise

The United Kingdom has enacted several initiatives the Help to Buy scheme to assist first-time homebuyers and other prospective purchasers get into the housing market and experts say …

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The United Kingdom has enacted several initiatives the Help to Buy scheme to assist first-time homebuyers and other prospective purchasers get into the housing market and experts say the measures are working. House builders are reporting increased orders for homes, which is a sign that more demand is being met. Even so, experts warn that other roadblocks like high regulatory costs and a lack of land are still factors in the market and will make sustained growth difficult. Analysts believe that the programs will nonetheless lead to more jobs and a more robust economy, which in turn will help free up supply. For more on this continue reading the following article from Property Wire.

Major house builders in the UK have met with Housing Minister Mark Prisk to tell him that the demand side mortgage support measures introduced by government are working and will lead directly to more homes being built.

The meeting took place as the latest figures showed that 12,500 reservations have been made through the government’s Help to Buy scheme up to the end of August. Officials said that the scheme is well on target to deliver the 74,000 homes intended over the next few years.

The figures came out as the property construction industry enters its traditionally busy autumn selling season and the meeting was an opportunity for the industry to tell the minister how well the mortgage scheme was working.

It was also a chance for the builders to discuss what steps could be taken to address the other constraints on supply, particularly the planning system and regulatory costs.

‘Help to Buy has been an unqualified success. It is addressing a lack of mortgage availability- the main constraint on the market, and if people can buy, builders can build,’ said Stewart Baseley, executive chairman of the House Builders Federation, after the meeting.

‘With the traditionally busy Autumn house buying period upon us, all the signs are that the next couple of months will see a significant number of people realising their ambition of home ownership. However, if it is to ultimately lead to a significant and sustained increase in housing supply, Ministers still need to act on the other constraints on supply, a lack of land and excessive regulatory costs,’ he added.

Prisk said that the UK’s housing market has turned a corner since the end of the unsustainable housing boom. ‘There are more first time buyers than at any time since 2007, while housing supply is at its highest level since 2008 and growing at the fastest rate for three years,’ he explained.

‘As a government we have worked hard and prioritized limited financial resources to help the housing market through one of its toughest times and create the right conditions for it to flourish. So I’m delighted that developers have pledged to use this momentum to increase output and get Britain building again,’ he added.

According to Mark Clare, chief executive of Barratt, customer interest in the Help to Buy scheme has been very strong particularly from customers previously locked out of the market by high deposit requirements. ‘Post the Budget announcement we saw reservation rates increase and partly as a result the number of homes we sold last year was up 20% on two years ago,’ he said.

‘We are now preparing for further growth and have committed £1 billion to land investment for new homes and we’re also expanding the business by taking on 600 new apprentices and graduates to tackle the skills shortage,’ he pointed out.

Jeff Fairburn, group chief executive of Persimmon, said that since the introduction of the Help to Buy measures in April the firm has seen a notable increase in customer interest and visitors to our sites, resulting in a stronger level of sales reservations across England.

‘In response we have increased our build activity to meet this increase in demand. If this early interest is maintained, the Help to Buy Scheme will play an important role in enabling the industry to increase the volume of new homes built over the coming months and years,’ he explained.

‘And in addition to helping the housing shortage this will have wider benefits for jobs and the economy. For example, Persimmon has already decided to make significant further investment in trade apprentices this year to support the anticipated increase in output,’ he added.

Pete Redfern, chief executive of Taylor Wimpey pointed out that it enables more homes to be built on sites the firm has already got open. ‘It also gives us more confidence about investing in future sites and infrastructure which creates more jobs and economic activity locally,’ he said.

This article was republished with permission from Property Wire.

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