Help To Buy Extension Boosts House Prices

Written By Unknown on Senin, 11 November 2013 | 18.57

There has been strong demand for homes under the Government's Help to Buy mortgage scheme extension, according to two major high street banks.

The Halifax and Royal Bank of Scotland said they received a total of £365m in mortgage applications from 2,384 would-be owners, with an average value of more than £153,000 per loan.

Help to Buy is designed to prompt loan providers into offering mortgages with deposits from 5%, but critics warn it risks causing another property bubble in Britain.

The figures also show that a quarter of those taking up mortgages under the Help to Buy scheme are trading up, as the loans are available on properties valued up to £600,000.

However a separate report found the number of surveyors reporting house prices lifting across the country has surged to an 11-year high in October as the Government's new Help to Buy scheme fuels "soaring" demand from buyers.

The Royal Institution of Chartered Surveyors (Rics) said urgent action must be taken to tackle the problem of demand outstripping the supply of homes for sale, which is "nowhere near" the levels needed to cope.

But Prime Minister David Cameron welcomed the findings on the number of people taking out the new mortgages and said: "Four weeks in and it's clear that Help to Buy is already delivering.

"In just one month, over 2,000 people have been accepted for a Help to Buy mortgage. Or put another way, 75 families every single day have been put on the path to owning their dream home."

Mr Cameron, who is holding a reception at Downing Street for some of those accepted for the mortgages, added: "Owning a home is about more than four walls to sleep at night. It's about independence, self-reliance, moving on and moving up. Above all, it's about aspiration."

The Rics survey found that sales volumes are running at their highest levels in more than five and a half years as more people flood into the market to snap up properties.

It said that 57% of surveyors reported price rises during the month, the highest percentage since June 2002, reflecting the imbalance between supply and demand.

Over the three months to October, surveyors sold just over 20 homes typically, the highest average since February 2008. They expect house prices and sales volumes to edge higher in the next three months.

Meanwhile, demand for rented property is increasing at its slowest pace in over a decade as more people make the jump on or up the property ladder.

Rics said that while the new phase of Help to Buy is "widening the net" of people who can get mortgage access, surveyors across the UK are reporting a "problematic" lack of new instructions from sellers.

Rics said that recovery is "spreading beyond the traditional economic powerhouses of London and the South East".

Meanwhile, the high value rental stock market in London faces oversupply, because of developers' rush to target rich foreign investors.

Last year more than £7bn of foreign money was ploughed into the high-end sector, while only 20% came from UK sources.

Estate agents Savills said that London now faces a shortfall of 50,000 new homes a year - equivalent to building five Olympic competitor villages each year.

Commons treasury select committee chairman Andrew Tyrie last week called on the Bank of England to shed more light on what powers it has to stop a house price bubble.


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