A property comparison website has made a defence of the controversial Help To Buy initiative, claiming it “acts as an important catalyst for getting renters on the property ladder” and praising its extension until 2023.
One comparison website - Reallymoving - recently claimed that Help To Buy actually added to the cost of a first time buyer’s home. It claimed on the basis of analysis of 70,000 clients that without Help to Buy the average first time buyer home is £257,908 compared to £277,968 paid by those who use the scheme.
But now a rival comparison website - Compare My Move - says there are 14 towns and cities in Britain where the average first time buyer can save enough to get on the property ladder in under a year through the Help to Buy scheme.
In Burnley, for example, the average first time buyer can save a five per cent deposit in seven months, on account of the low house prices and rent costs. First time buyers in Burnley can save up the £10,436 needed for a 15 per cent deposit in one year and nine months - so this means that with Help to Buy it’s 14 months faster.
Compare My Move co-founder Dave Sayce says: “In many cities it’s a race against rent to save a deposit as a prospective first time buyer. In cities and towns where rent greatly outstrips the national average, it can take more than a decade for renters in their 20’s to save up a 15 per cent deposit.”
And he adds: “It’s clear from our research that the Help to Buy scheme acts as an important catalyst for getting renters on the property ladder, and its extension to 2023 in the recent budget will act as a lifeline to generation rent.”
Help To Buy has been fiercely divisive within the industry.
Nationwide estimates that in the last decade over a million would-be homeowners have been unable to buy a home of their own because of difficulties obtaining a mortgage or saving for a deposit. “Without Help to Buy, the number would be larger still” says the lender.
However, many others say the scheme has effectively benefitted house builders and their companies’ share prices more than buyers, because it has indirectly accelerated price rises of new-build homes where the scheme applies.