Help to Buy has now helped almost 88,420 people to purchase a home, the UK government has announced, but new research suggests that the scheme is being held back by one of the problems it is designed to solve.
The scheme was introduced in 2013 to help taxpayers who could pay a mortgage but couldnât afford the high deposits demanded by lenders in the wake of the financial crisis. It was joined by the elp to Buy: NewBuy scheme, which offers 95 per cent mortgages for those buying new-build properties.
Together, Help to Buy is designed to encourage first-time buyers onto the housing ladder, as well as boost construction by stimulating demand for new build properties.
Indeed, over half of the homes bought through Help to Buy have been new homes, helping to contribute to the 37 per cent rise in private house building since the scheme's launch.
The average house price for Help to Buy purchases was Â£185,000, significantly below the national average property value. New research from Zoopla, though, shows that the average price of property eligible for Help to Buy has risen 5.5 per cent in the past year, as the country's chronic housing shortage takes it toll.
The number of properties on the market eligible for the governmentâs Help to Buy scheme has fallen 7.4 per cent in the last year, according to property website's analysis of properties for sale in England and Wales up to a value of Â£600,000. As a result, the average price of properties for sale that qualify for Help to Buy has risen 5.5 per cent since March 2014.
The biggest fall in properties eligible for Help to Buy in the past year has been in the East of England, with a 12.3 per cent reduction in suitable stock on the market, while average prices have climbed 6.1 per cent over the same period. In London, the typical value of a property qualifying for Help to Buy has risen by 11.7 per cent since March 2014.
Further south, the number of properties for sale in Worcester, Cheltenham and Exeter that qualify for Help to Buy support has increased 5.4 per cent, 3.3 per cent, and 3.2 per cent respectively in the past twelve months.
Lawrence Hall of Zoopla.co.uk commented: "The Help to Buy scheme was intended as a leg up for flailing first-time buyers, but in some areas that footrest has since been pulled from under their feet. Greater demand hasnât been met by greater supply of homes on the market, and instead the soaring price growth of the past year appears to have airlifted many properties out of the starter home zone. The pool of homes on the market within reach of Help to Buy assistance needs to expand, or this pinch on supply will continue to inflate prices at the bottom rungs of the ladder."