Help to buy 'forcing up house prices' as demand rockets but supply dwindles
Published by Jon Land for 24dash.com in Housing and also in Central Government
Mortgage availability 'set to worsen'
Help to buy is increasing the demand for homes but failing to have an impact on supply which is forcing up house prices, according to a report published today.
The number of eligible properties under the government’s flagship scheme in England and Wales has fallen, while average prices have risen, since the launch of its second phase, property website Zoopla.co.uk reports.
The analysis of properties available for sale in England and Wales up to a value of £600,000 shows that help to buy has done little to encourage sellers into the market since October 2013.
Since the launch of the mortgage guarantee, the number of properties eligible under the scheme has actually fallen 1.9%. The supply squeeze has pushed up the average price of properties eligible under help to buy by 2.2%, from £222,168 in October to £227,010 today.
The South East of England has seen the biggest falls in stock levels since October with the number of eligible properties down 7.4%, whilst average prices have risen 3.6% over the same period and now stand at £274,464.
London has also seen a significant drop in the number of properties eligible under help to buy which has fallen by 6.7% since October. Wales and the Midlands are the only regions to have seen increases in the number of help to buy eligible properties available.
The biggest fall in properties eligible for help to buy over the last six months has been in Brighton where there are now 15.8% fewer properties for sale that meet the criteria than there were in October. Walsall and Stockport have also seen large drops in eligible stock with 14.9% and 14.7% fewer properties for sale respectively.
In contrast, Middlesbrough, Wirral and Newport have seen the largest increases in the number of properties that qualify for the scheme coming onto the market with rises of 38.7%, 37.4% and 25.5% respectively.
Lawrence Hall of Zoopla.co.uk said: “The help to buy scheme was introduced to help grease the wheels for buyers locked out of the market. But fuelling demand was also expected to spark sellers into action and increase the supply of properties available on the market.
"That spark seems yet to ignite as the overall level of properties eligible under help to buy has actually fallen over the last six months. Unless stock levels increase, the supply shortage will continue to put upward pressure on prices as more buyers enter the market.”