New build property prices have risen 2% in the past year since the launch of the government’s Help to Buy equity loan scheme. This compares to a 4% lift in the previous 12 month period.
Every region with a significant number of Help to Buy equity loan completions (more than 1,500) has seen new build prices grow more slowly than the market as a whole.
Research by the broker firm found buyers using the Help to Buy equity loan typically purchase cheaper properties than average. A buyer using the scheme pays around 22% less than the UK average new build cost, it said.
The average property purchased using the scheme is worth £186,477.
Buyers getting onto the property ladder using the equity loan scheme so far in 2014 have had an average age of 32 and earn £32,668.
Andy Frankish, new homes director at Mortgage Advice Bureau, said: “These findings show what good sense it makes to extend the Help to Buy equity loan scheme until the end of the decade. Buyers are taking advantage of government help to make entry-level purchases rather than chasing properties at the top end of the market.
“The scheme’s arrival has also worked wonders to keep the costs of buying a new build home down. Improving the supply of housing is having an immediate and powerful effect on house prices by keeping inflation in check and avoiding a scenario where aspiring owners are priced out of the market.
“Help to Buy equity loans are proving a roaring success by opening up the entry point to the property ladder and helping first-time buyers to make their sums add up. Developers will take confidence from public backing until 2020 and can use this window to address the housing shortage left by the construction slowdown.”
Figures released by housebuilder Bellway showed a 25% increase (3,245) in the number of homes sold for the half year ended 31 January 2014.