"Although Help to Buy will likely be phased out in the coming years, housing affordability still remains a major issue, especially in London"
Proportunity believes that high property prices and lack of new-build developments have limited the ability of first-time buyers to take advantage of the scheme in central London.
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.
East London’s Barking and Dagenham topped the rankings, with 61.7% of new-build homes sold utilising the Scheme. 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 (not just new-builds) and found that the Scheme 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.
Vadim Toader, founder and CEO of Proportunity, said: “While Help to Buy has had its fair share of criticism, the scheme undoubtedly breathed new life into a struggling housing market and helped thousands achieve their dream of homeownership in the capital.
“Outer London boroughs have seen the most Help to Buy activity, while places such as the City of London and Kensington and Chelsea have seen virtually no Help to Buy transactions. This is likely down to the scheme’s restricted eligibility to new-builds only and the lack of accessibly priced new developments coming forward in these areas, further limiting people from taking advantage of Help to Buy thanks to the price cap imposed by the government.
“Although Help to Buy will likely be phased out in the coming years, housing affordability still remains a major issue, especially in London and the South East. Whether it is from the government, their parents or new entrants like us, many first time buyers will need financial assistance from someone if they are to get onto the housing ladder at a reasonable age. ”
