The number of properties available in London under Help to Buy (HTB) has declined by 64% since 2017, according to modular homes provider Project Etopia.
The government’s housing scheme launched in 2013, which saw first-time buyers springing into action and making the most of the equity loan which, in the capital, covers up to 40% of a new build home worth up to £600,000.
However, properties available under the scheme are quickly disappearing, falling to 1,619 from 4,535 in December 2017 in London.
In fact, houses available across the capital under the scheme have been disappearing at what Etopia describes as an alarming rate. In Q4 2017, houses available under HTB were ‘extinct’ in a quarter of all boroughs, but that has now risen to nearly half (15 boroughs).
Hammersmith & Fulham was the area worst affected by a shortage of Help to Buy properties, with only one property left – a £595,000 one-bedroom flat – at the time of the study. Among the boroughs with the lowest number of HTB homes available, Kensington and Chelsea recorded three, and Westminster recorded four.
What’s more, housebuilding statistics appear to show that the Help to Buy drought is purely due to developers not being able to keep up with demand. The number of houses completed in London by private developers remained stable in the past 12 months at 17,430 (Q4 2017 to Q3 2018). This was only marginally down on the 17,770 completions in the previous 12 months.
Over the same period, the number of properties bought in London with Help to Buy has risen 23.7% in a year to 5,156 in the 12 months to September 2018.
In total, 20 out of 32 boroughs have fewer than 50 Help to Buy properties for sale, compared to seven in 2017. Houses make up just 5.4% of the overall stock across the capital, declining from 13.3% of all Help to Buy properties in London in December 2017.
“It’s all very well giving buyers a leg up but it’s no good if the properties aren’t there in the first place,” Joseph Daniels, chief executive officer of Project Etopia, commented.
“Building rates in the capital are relatively stable but the popularity of Help to Buy is surging and developers just cannot keep up with demand.”
He said the gradual extinction of Help to Buy homes in the capital demonstrates that interest-free government loans are not the answer to the housing crisis.
“Families are being particularly hard hit, with houses available under Help to Buy now extinct in half of London boroughs, pushing overwhelming demand into other boroughs or forcing people out of the capital altogether.”
Daniels said only rapid house building on a large scale and innovative ideals – including modular construction – will prove to be a lasting antidote.