There is no denying the figures published demonstrate that the controversial government initiative Help to Buy is a key factor in the house building market pick-up. This was much needed in my opinion to boost house building activity and the recovery of the economy as a whole.
Over 18,000 reservations were made in the first seven months of the equity version loan of Help to Buy. Each reservation means a new build home is being sold and as a result house builders are using this momentum to build more homes.
Coming in to the New Year, Bromak is experiencing rapid increases in the number of permanent job vacancies being registered with our key clients in house building not only from the leading UK players but also from the smaller regional developers who are now looking to ramp up mothballed sites. The demand has come across all role disciplines from site and construction management to sales, technical, land and commercial.
Stewart Baseley, executive chairman of the Home Builders’ Federation said: “Help to Buy is driving a big increase in house building activity. If people can buy, builders will build. Existing sites are being built out quicker and developers are looking to start on new ones sooner.
“As a result there is an increased demand for labour and materials and we are seeing the supply chain respond. The increase in house building activity is creating jobs both directly on site and indirectly in the supply chain.”
I understand the concerns surrounding this scheme, most notably relating to the increase of housing prices and the creation of a housing bubble. However, according to government data released in November 2013, “the average Help to Buy mortgage represents 24 per cent of borrowers’ gross income, the same as the Council of Mortgage Lenders’ historical average” which shows reasonable affordability statistics.
It is important, though, that supply meets demand to avoid high rises in house prices but now developers can once again build with some confidence and invest in future sites. Hopefully. this scheme will go a long way to decreasing the housing shortage and more importantly fuelling the growth of the economy.