Demand still high for homebuyer help schemes

Demand high for buying schemes but insufficient stock available in the current market

Research by the Gradual Homeownership provider, Wayhome, reveals that while Help to Buy may have closed its doors to the nation’s homebuyers, demand for a helping hand onto the housing ladder via a home buying scheme remains high, with a third of all properties offering this additional help already snapped up by buyers.

Wayhome analysed current market for sale stock, looking at what proportion of listings offer the help of a home buying scheme, as well as buyer appetites for these homes based on the proportion of available stock that has already gone under offer or sold subject to contract.

Since 2013, the Help to Buy scheme has provided equity loans to enable would-be homebuyers to get their first foot on the property ladder. In October 2022, however, Help to Buy closed for new applications and on 31st March this year, the final completion deadline will bring an absolute end to the scheme.

As such, buyers now have to look elsewhere to find a leg-up onto that all-important first rung of the housing ladder, with alternative options including Wayhome, The Mortgage Guarantee Scheme, Shared Ownership, Deposit Unlock and First Homes Scheme.

Buyer demand for home buying schemes
Analysis from Wayhome reveals that demand for buying schemes is still strong.

In fact, a third of all properties (33%) listed for sale with the benefit of a buying scheme across Britain have already been snapped up by eager buyers.

Demand is at its highest in the West Midlands where 48% of all homes for sale with a buying scheme boost have already gone under offer or sold subject to contract, followed by the East of England (44%) and Yorkshire and the Humber (43%).

At city level, it’s Bristol that tops the table, where 70% of all homes offering the aid of a buying scheme have already been pounced upon by the city’s homebuyers, with Cardiff (65%) and Sheffield (50%) also within the top three.

Lack of stock to meet demand
However, while demand is strong, there remains a significant issue when it comes to the supply of stock offering the additional help of a buying scheme.

Across Britain, the 13,066 homes currently offering this additional help to homebuyers account for just 2.2% of total homes listed for sale.

These stock levels fall as low as 0.3% in Scotland and in the city of Glasgow alone, it’s way down at 0.1%.

Stock is also drastically low in Wales (0.8%), the North East (1.4%), and Yorkshire & Humber (1.5%).

In fact, there are only two regions that can boast above average stock levels. These are the South East (3.9%) and London (2.7%).

Co-founder and CEO of Wayhome, Nigel Purves, commented:

“The Help to Buy scheme has had its fair share of criticism due to the fact that it’s fuelled demand while the government has done very little in terms of building more homes.

This imbalance has contributed to house prices climbing ever higher, however, there’s no denying that the scheme has helped a huge number of buyers realise their dreams of homeownership. Now that it is no longer available, many more are left struggling to overcome the initial financial obstacles associated with buying a home.

The private sector is doing its best to fill the void left by Help to Buy, but as our research shows, we simply can’t plug the gap alone. At the same time, the vast majority of buying schemes are also reliant on the delivery of new-build properties reaching the market, which further reduces the options available to homebuyers. As a result, there are very few schemes providing a foot up across the new-build and existing markets, with our Gradual Homeownership being one of them.

It will be interesting to see if the issue is addressed in this week’s spring statement but, as it stands, the plight of the nation’s homebuyers continues and countless people are unable to make the jump from renting to owning.”