Help to buy is making UK houses more expensive with an increased demand and a dwindling supply
The number of eligible properties under the government’s flagship scheme in England and Wales has fallen, while average prices have risen, since the launch of its second phase, property website Zoopla.co.uk reports.
Lawrence Hall of Zoopla.co.uk also said:
“The help to buy scheme was introduced to help grease the wheels for buyers locked out of the market. But fuelling demand was also expected to spark sellers into action and increase the supply of properties available on the market.
“That spark seems yet to ignite as the overall level of properties eligible under help to buy has actually fallen over the last six months.
“Unless stock levels increase, the supply shortage will continue to put upward pressure on prices as more buyers enter the market.”
The analysis of properties available for sale in England and Wales up to a value of £600,000 shows that help to buy has done little to encourage sellers into the market since in October 2013.
Since the launch of the mortgage guarantee, the number of properties eligible under the scheme has actually fallen 1.9%.
The supply squeeze has pushed up the average price of properties eligible under help to buy by 2.2%, from £222,168 in October to £227,010 today.
The South East of England has seen the biggest falls in stock levels since October with the number of eligible properties down 7.4%, whilst average prices have risen 3.6% over the same period and now stand at £274,464.
London has also seen a significant drop in the number of properties eligible under help to buy which has fallen by 6.7% since October.
Wales and the Midlands are the only regions to have seen increases in the number of help to buy eligible properties available.
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