The scheme, which has so far helped over 25,000 households to afford to buy or reserve a new-build home, is to be extended to 2020 and a further £6 billion invested to help 120,000 more households purchase a new-build home.
Every home built under the equity loan scheme is a new-build home, and with research showing the scheme currently supports up to 30% of all new build homes in England, extending the scheme will provide greater certainty to housing developers so they can invest in building the new homes of the future.
The Help to Buy: mortgage guarantee is unaffected by this change to the Help to Buy: equity loan scheme.
The Chancellor also set out ambitious plans and up to £200 million of public investment for a major new development around the high speed rail station in Ebbsfleet in Kent, which is only 19 minutes from Central London, to provide up to 15,000 new homes based on existing brownfield land.
Nicholas Ayre, managing director of homebuying agency Home Fusion, says:
"The extension of the first phase of Help to Buy until 2020 will be welcomed by house builders who have received a significant boost since the scheme was introduced last April. It is telling that the Chancellor has not made the same commitment to extend the mortgage guarantee element of Help to Buy: this may be because it has not been long introduced so it's too early to judge its full impact. It has also been roundly criticised in some quarters for fuelling a housing bubble in London and the south east, so to commit to extending it may leave the Chancellor open to further criticism."
Charles Haresnape, MD Residential Mortgages at Aldermore Bank said:
“An extension of Help To Buy to the end of the decade is good news for first time buyers who continue to struggle with deposit raising as house prices rise. This demonstrates that the government believes this is sustainable and not inflationary.”
