Effects of Help to Buy in London

Fri, 05 Sep 2014

Effects of Help to Buy in London
Of the 48,000 homes that were recently announced to have been sold via the Help to Buy scheme since its instigation, a critically high portion went to those in London and the South East.

It has long been feared and debated whether Help to Buy is fuelling a housing bubble in the Capital as well as huge surges in house prices, but no one has so far produced convincing evidence whether this is the case or not.

The 5% deposit enabled by the scheme was supposed to help first time buyers get themselves onto the property ladder, as gathering deposits is usually one of the biggest obstacles preventing people from buying their first home.

However, some critics say that the scheme has been helping people buy houses that would not struggle to buy a home without the scheme's help, and are using it to put down a cheaper lump sum, supported by the fact that the price cap was set at a very high £600,000.

Of the 48,000 successful Help to Buy sales that have been concluded since the scheme began, 7,501 of those were in the South East of the country, and 2,837 were in London.

Many people believe that this concentration in London is driving house prices sky high, as there is not enough development going on in the area to keep up with demand.

However, despite accounting for 19% of all sales, the Capital still has some areas that haven't been affected by the scheme. Eight boroughs in London have remained untouched by the equity loan part of the scheme.
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