PM: H2B2 is tackling supply issues
At the Help to Buy reception earlier today the Prime Minister said: “One point that people were concerned about was would this just add to house prices, rather than actually generating more house building.
“Well, we can see this year house building up by a third. So I believe this scheme is not only helping hardworking people achieve their dreams; it’s also helping the long-term plan that the government has for turning our economy round.”
The Prime Minister was also asked if Help to Buy was going to make existing problems with affordability worse.
He said: “This is tackling two problems. First, the problem that there are many young people who can afford a mortgage but are struggling to save for the deposit because there aren’t 95% mortgages available.
“This makes those mortgages available. We’re not encouraging people to buy homes they can’t afford, or have mortgages they can’t afford; we’re helping them get mortgages they can afford.
“But secondly, it does help unlock the problem of a shortage of housing supply. Put frankly, the builders won’t build, the developers won’t develop unless the buyers are able to buy.
“And that’s why we’re seeing now growing levels of housing investment and house-building in our country. The two issues are linked.”
The Help to Buy scheme has been plagued by accusations that it will cause a housing bubble and the government has been accused of forgetting the lessons learnt from the recession.
Just yesterday RICS research found that the proportion of chartered surveyors reporting price rises hit an eleven-year high as the net balance of respondents reported rises hit 57%.
It was the highest reading since June 2002 and RICS said it demonstrated the impact that the imbalance between supply and demand is having on the market.
The RICS survey found that whilst surveyors across the country note that while Help to Buy is boosting buyer numbers, a lack of new instructions from vendors is proving problematic.
The RICS survey came on the back of research from Savills which revealed that London alone needs an additional 50,000 new homes a year – the equivalent of a whopping 18 new Olympic Villages and roughly double the current building rate.