Project Etopia: Some areas becoming over reliant on Help to Buy

Warnings have been made about the over reliance of somehousing markets on Help to Buy after research revealed the scheme was responsible for up to 97% of new build sales in some areas.

For example Northampton had 97.1% of its new builds were sold under the scheme last year, according to a study by modular homes developer Project Etopia.

The scheme is due to end in 2023 with new restrictions set to come into place in 2021.

Joseph Daniels, CEO of Project Etopia, said: “Building more homes is the long-term solution to the housing crisis, not a free leg up.

“This startling research shows just how far Help to Buy is underpinning and driving the new build market across the whole of England.

There is a danger that, once the scheme ends, the rug could be pulled out from beneath those areas that have come to rely on Help To Buy to too great a degree.

This study gives us an early indication of which markets will be most-resilient when the scheme comes to an end.”

More than half of all new-build property purchases in England were funded by the government-backed Help to Buy equity loan scheme last year.

Help-to-Buy was used in conjunction with 52,057 (51.9%)of 100,399 new build purchases. Project Etopia said this reinforces its "concerns that when the government-backed scheme comes to an end, the nationwide housing market will be dealt a serious blow".

This table shows the 10 locations where the highest percentage of new builds were bought using Help to Buy in 2018:

Reliance on Help to Buy is even more acute in England’s major towns and cities. Among the 105 locations in the Etopia study, 20,179 (54.6%) of the 36,950 new build sales in these areas were funded by Help to buy.

Hotspots include Burnley, Derbyand Warrington,where more than 90% of new builds were purchased with the scheme.

With Help to Buy, the government lends up to 20% of the cost of a new-build home. In London, the value of the equity loan can be up to 40%.

The location least reliant on Help to Buy was Cambridge where only 17.7% of new builds were bought through the scheme.

This table shows the 10 locations where the lowest percentage of new builds were bought using Help to Buy in 2018: