New homes bonanza as 10,000 queue up for Help to Buy

New figures show that there have been 10,000 reservations of new-build homes under the Help to Buy equity loan scheme, with nearly 3,000 sales already completed.

One of Britain’s biggest builders, Barratt, said it will sell 20% more homes this year than two years ago.

Launched just four months ago, the scheme enables first-time and other buyers to purchase new homes worth up to £600,000 with only a 5% deposit.

CLG Secretary of State Eric Pickles hailed the scheme a success and said it had helped kick-start the housing market.

He said: “With over 10,000 reservations in four months, it’s clear that the Help to Buy: Equity Loan is working well.

“By dealing with the big challenges, we are helping thousands of young people and families get on and move up the housing ladder, and Britain is building again.”

House builders also heaped praise on the scheme.

Mark Clare, chief executive of Barratt, said: “Customer interest in the Help to Buy scheme has been very strong as it addresses the issue of lack of mortgage finance at higher loan to values.

“Interest has been particularly encouraging from customers previously locked out of the market by high deposit requirements.

“After the announcement [in the Budget] we saw reservations step up 18% and visits to the Barratt website increase by around 30%.

“Our production will rise to meet higher levels of demand and it’s likely that our completions this year will be up 20% on two years ago. We are investing in land and bringing it through planning too, and we are also expanding the business by taking on 600 new apprentices and graduates to tackle the skills shortage that could constrain future growth.”

Jeff Fairburn, group chief executive of Persimmon, said: “Since the introduction of the Help to Buy measures in April, we’ve seen a notable increase in customer interest and visitors to our sites, resulting in a stronger level of sales reservations across England. In response we have increased our build activity to meet this increase in demand.

“If this early interest is maintained, the Help to Buy scheme will play an important role in enabling the industry to increase the volume of new homes built over the coming months and years.

“And in addition to helping the housing shortage, this will have wider benefits for jobs and the economy. For example, Persimmon has already decided to make significant further investment in trade apprentices this year to support the anticipated increase in output.”

Pete Redfern, chief executive of Taylor Wimpey, said: “It enables us to build more homes on the sites we have already got open, and also gives us more confidence about investing in future sites and infrastructure which creates more jobs and economic activity locally.”

The Help to Buy equity loan scheme is designed to help up to 74,000 buyers of new properties only over a three-year timespan.

Under the scheme, buyers receive a 20% equity loan, interest-free for five years.

The second part of Help to Buy is a mortgage guarantee scheme, administered by the Treasury, which will begin in January. This will enable lenders to use Government-backed guarantees to offer £130bn worth of mortgages with deposits of just 5% on both new and existing properties.