Persimmon, the home builders have reported a boost in house sales in the first quarter of this year compared to 2013, and it is down to the Help to Buy scheme.
The year has seen a boost in 25% of sales per site, Persimmon has reported, and sold 7,200 homes in the first few weeks of 2014, which was a 38% boost on the same amount sold at the start of 2013.
Apparently builders are mobilising to take advantage of eager buyers.
However, the average selling price has risen 3% to £200,400. This is a sign that the building market is not building fast enough and that demand has risen and is not being met. This is bad news for potential house buyers as it means forking out a bigger deposit and taking out a larger mortgage overall.
Ed Balls has opposed the scheme, stating that it doesn’t stimulate the building market enough and just raises demand. These figures seem to support him.
Furthermore, the Bank of England’s benchmark rate is at its record low, where it has sat for the last six years. This will inevitably grow again, and so there is worry about the amount of people left stuck for money when the variable mortgage rates go up.