Beefed-up Help to Buy mortgage scheme set to boost property market confidence, increase construction and create jobs, say housebuilders
By Daily Mail Reporter
The beefed up Help to Buy mortgage scheme will boost confidence in the property market, increase construction and create jobs, senior industry figures said.
George Osborne this week extended the shared equity mortgage support scheme to 2020 having previously said it would end in 2016 – despite fears the scheme is fuelling a new housing bubble.
Barratt Developments, Britain’s biggest housebuilder, will now take on 3,000 new staff as the firm ramps up construction to keep up with demand.
Build me up: Help to Buy is expected to increase construction and create jobs
‘We can now invest with more confidence to increase production,’ said chief executive Mark Clare.
Rival builder Crest Nicholson said Help to Buy – through which the government offers loans to buyers with small deposits to get them on the housing ladder – ‘provides additional certainty’ as Crest reported a 50 per cent rise in forward sales to £330million.
The recovery in the housing market was underlined by estate agent Savills which sold more than £6billion worth of UK homes last year as the boom in London rippled out to the regions.
The company reported a 35 per cent rise in profits to £70.1million for 2013 and raised the divi from 16p to 19p, while shares rose 22.5p to 638.5p. Crest shares were also on the rise, up 2p to 400p, but Barratt fell 12p to 412.8p.
Meanwhile, figures showed gross mortgage lending hit £15.2billion last month – up 43 per cent on a year ago and the strongest February since 2008.
The Council of Mortgage Lenders, which published the report, said first-time buyers in particular have benefited from the Help to Buy scheme.
‘The housing market got a further boost from this week’s Budget,’ said CML chief economist Bob Pannell. ‘This, together with benign developments in the economy more widely, should bolster short-term sentiment and activity.’
But critics fear a property bubble is inflating – paving the way for a new boom and bust in the housing market.
The Chancellor this week asked the Bank of England to be ‘particularly vigilant against the emergency of potential risks in the housing market’.
Bank governor Mark Carney has insisted the Old Lady is ‘well armed’ to deal with the threat but would not be ‘trigger happy’.