Help to Buy takes off in Yorkshire

THE take-up of the Government’s controversial equity loan scheme for new homebuyers has been far greater in Yorkshire than in London, according to new figures which dispel fears the Treasury is fuelling a property boom in the capital.
Communities Secretary Eric PicklesCommunities Secretary Eric Pickles
Communities Secretary Eric Pickles

Statistics released yesterday show 1,300 households across Yorkshire have taken up the offer of a 20 per cent Treasury loan towards a new-build home since Help to Buy was launched last April.

The equity loan scheme is part of a package of measures designed to help people onto the property ladder, but had been criticised by some for helping to fuel the latest property bubble in London.

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Business Secretary Vince Cable has called for the scheme to be revised due to the capital’s “raging housing boom”. But David Cameron dismissed criticisms that Help to Buy was “London-centric”, insisting it would enjoy far greater take-up outside the capital.

The latest figures appear to confirm the Prime Minister’s view, with take-up of the loans in Yorkshire some 60 per cent higher than in London, where just 810 households have taken out a Treasury-backed loan since April.

Communities Secretary Eric Pickles said the scheme was proving effective, with buyers were returning to the housing market “in their droves”.

“In 2010 we inherited a broken housing market, where buyers couldn’t buy, builders couldn’t build, and lenders couldn’t lend,” Mr Pickles said.

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“We’re now seeing buyers returning to the market in droves, and new homes being built across the country. Both buying and building are at their highest levels since 2007, underpinned by our action to cut the deficit and keep interest rates low.”

Under the equity loan scheme, the Government will lend up to 20 per cent of the cost of a new-build home, meaning buyers are only required to find a five per cent deposit and 75 per cent mortgage. The loan is interest-free for the first five years.

A separate mortgage guarantee scheme was also launched by the Government last November under the Help to Buy banner, which, unlike the equity loans offer, applies to pre-owned as well as new-build houses.

The figures published yesterday show significant disparities between different cities within Yorkshire in terms of the numbers of people taking up the loan offer.

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Help to Buy has been used by 230 households in Leeds, 153 in Bradford, 130 in Hull and 113 in Wakefield – but only 61 in Sheffield and just 25 in York. Outside of the main cities, take-up has been far smaller, with equity loans given to just two households in Harrogate and none at all in Craven or Richmondshire.

Across the country as a whole, 12,873 households have now been helped onto the property ladder through Help to Buy.

There was further positive news for the construction industry yesterday as two of the UK’s largest housebuilders, Barratt Developments and Redrow, both reported positive financial results and increased housing starts.

However, Labour warned the Government is still building nowhere near enough homes to meet demand.

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Shadow Housing Minister Emma Reynolds said: “Any help for first-time buyers struggling to get on the property ladder is to be welcomed.

“But the truth is private renting is becoming the norm for many young people as home ownership drifts further out of reach.

“We need to build many more homes to keep up with demand.

“Labour will tackle the housing crisis and increase house building to at least 200,000 a year by 2020.”

Barratt feeling the benefit from strong local demand: Business, Page 18.