Posts with tag: Help to Buy Loan

New research has indicated that private house builders in Britain could build 150,000 new homes by 2020, if certain barriers are relaxed.

Analysis from real estate firm Savills shows that private builders presently build the lions share of new homes in England, and have capacity to increase input through controlled expansion. Their analysis also shows the major house builders are only just returning to their operating targets, with stronger finance availability allowing medium sized house builders to branch out.

Increases

Data from the Savills report shows that private house building in the UK have increased in the six years since the economic downturn. Approximately 45% of all new affordable homes were built by private house builders in the last year.

The majority of new homes (54%) are in the process of being built by the eleven largest house builders in Britain, those being ones that can build over 2,000 homes per year. One third of all homes are being built by medium sized builders, those who can build between 100 and 2,000 homes per annum.[1]

Encouragingly for the government, the report shows that the Help to Buy Equity Loan and NewBuy schemes subsidised 30,146 new home purchases in England last year. An average of 32% homes amongst the largest house builders are supported by the scheme.[2]

Future potential

The report from Savills reads, ‘we estimate Help to Buy will support 30,000 new home sales per year and our estimate of potential delivery of homes by the private sector up to 2020 relies on its continuation. If Help to Buy comes to an end after its current funding expires in 2020, we are likely to see start volumes tapering off up to two years before the end of the scheme in anticipation.’[3]

Additionally, the report shows that funding is easier for SME house builders as competition amongst lenders means that choices are expanding.

 

[1] http://www.propertywire.com/news/europe/uk-new-home-building-2015061210624.html