Help to Buy (HtB) has helped more people in outer London boroughs than inner London boroughs new analysis published today reveals, with high property prices and lack of new-build developments limiting the ability of first-time buyers to take advantage of the scheme in central London.
The research carried out by fintech firm Proportunity, a private provider of HtB-style equity loans, suggests more must be done by the next government to boost homeownership in the capital.
Proportunity looked at the proportion of new-builds in each borough that were sold with a HtB loan from when the scheme was introduced in April 2013 to Q1 2019, when the data is last available. From there the start-up, which recently raised £2m in funding, was able to identify the boroughs that had benefited most from the government-backed loans.
East London’s Barking and Dagenham topped the rankings, with 61.7% of new-build homes sold utilising HtB. Waltham Forest (51.7%) was the only other borough to break the 50% mark, with Sutton (47.4%), Havering (44.2%) and Redbridge (38.8%) also ranking in the top five.
However two inner London boroughs saw almost no HtB activity, with Kensington and Chelsea only seeing 14 loans since 2013 (1.1% of all new-build sales), while the City of London has only had five (0.7% of all new-build sales),
Across the whole of London, HtB supported 21.75% of new-build sales. However excluding properties costing over £600,000 – the threshold put in place by the government – this figure rises to 29.73%.
Proportunity also looked at HtB as a proportion of total sales and transactions since 2013 (i.e. not just new-builds) and found that HtB made up only 2.6% of total sales across London. The boroughs where HtB made up the highest proportion of all sales included Barking and Dagenham (5.2%), Greenwich (4.6%), and Barnet (4.6%).
Proportunity’s research showed that 84.2% of all HtB loans since the scheme launched have been used on flats, despite recent research from Zoopla showing first-time buyers increasingly favour three-bedroom houses.
HtB was introduced by the Coalition government in April 2013 to help boost both housebuilding and homeownership.
However the Conservatives, which extended the scheme after their initial victory in 2015, have since said they would look to wind HtB down by 2023 and the initiative faces an uncertain future under the Labour party too.