More than eight out of 10 buyers would not have been able to buy the same property without assistance, according to the analysis published alongside the 2018 Budget.
However, more than a third say they are trapped and feel unable to move up the property ladder – a feeling which is strongest among those in flats and smaller sized property.
The introduction of the initiative in 2013 also encouraged lenders into higher loan to value lending and opened up the new build mortgage market to more players by making it more financially viable, providers told the government.
From 2021 the scheme is to be extended for two years until 2023 but will be more targeted with regional purchase price caps in place and only first-time buyers allowed, it was revealed in the 2018 Budget.
Price caps start at £186,100 in the North East and go up to £600,000 in London.
Developers said the scheme had resulted in an additional 43% new homes being built between 2013 and up to January 2015, government analysis showed.
And it was estimated between 40-50% of Help to Buy equity loan home sales would not have happened without the assistance.
Off the back of the scheme, confidence in the market improved as well as the profile and awareness of the new build market, developers said.
Critics have welcomed the extension and clarity of the scheme.
Onus on lenders
Justin Gaze, head of residential development land at Knight Frank, said: “No industry should be reliant on government assistance indefinitely, so the decision by ministers to restrict the scheme to first-time buyers with regional purchase price caps is a sensible one.
“However, the ‘deposit gap’ that the Help to Buy equity loan scheme was established to overcome is still very much a problem.
“UK house prices are 37% higher than when the scheme was introduced in 2013 and the mortgage market for those with only a 5% deposit remains very thin.
“For prospective buyers, finding the funds for a deposit will remain the biggest barrier to home ownership.
“From 2023, the onus will move to mortgage lenders and the development community to help buyers bridge this gap.”
Rob McCoy, senior business and product manager at TMA added: “The decision by the chancellor to introduce a new Help to Buy Equity Loan scheme for first-time buyers in April 2021 is to be applauded.
“Making this available at 1.5 times the current forecast regional average first-time buyer price – and up to £600,000 in London should see many more provided the opportunity to step onto the property ladder.”