Help to buy - its impact on home buyers

The Help to Buy Equity Loan Scheme has made consumer demand more effective, feeding through to an increase in housing supply.

Investment in the scheme up to January 2015 is estimated to have generated 43% additional new homes, an equivalent of contributing 14% to total new build output between April 2013 and June 2015.

The findings come from a study by Ipsos, in partnership with Peter Williams, Christine Whitehead and the London School of Economics, on behalf of the Department of Communities and Local Government.

The research sought to make a robust assessment of the Help to Buy Equity Loan scheme which was introduced in April 2013 with the intention of providing stimulus to the housebuilding market. The objective was to measure ‘additionality’ i.e. the increase in the production of housing services, over and above what would have been produced in the absence of the scheme.

The research also provided evidence of the experiences and implementation of the scheme from the perspective of providers and consumers.

Other findings include:

• Developers report seeing improved confidence in the market and think the Help to Buy Equity Loan made a strong contribution to the profile and awareness of the new build market.
• Developers have largely positive views of the experience of the scheme’s process, and most feel that it will continue to play a valuable role in helping access to the market.
• Lenders were also positive – believing that the scheme has helped to make it more financially viable to enter the new build lending market – but were less clear than developers on the extent to which it has resulted in increased levels of output.
• 70% of consumers assisted by the scheme say they were very satisfied with the overall experience of purchasing property using a Help to Buy Equity Loan, and 82% say they would not have been able to buy the same property without assistance.

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Technical information

The consumer survey was conducted by telephone and is based on 501 responses completed between 11th May 2015 and 1st June 2015. Data is weighted to the profile of consumers who had used the scheme from its introduction in April 2013 to January 2015. Data from completed interviews have been weighted to be representative of this population in relation to first-time buyer status, location, property sized purchased and time of completion.

In-depth, semi-structured qualitative interviews were conducted with 20 senior representatives of developers, 10 senior representatives of lenders and five with individuals in organisations representing wider developer and lender interests.