According to new build sales platform Unlatch, completions under the scheme in England had been growing, rising by over a third, 36 per cent, between 2016 and 2019 to 52,247.
It also found that the value of the loans rose from £2.1bn in 2016 to 2019 and the market value of the homes went up from £9.9bn in 2026 to £15.8bn in 2019.
The scheme was launched in 2013 with the aim of helping borrowers get on to the property ladder in the new build sector with a five per cent deposit. It was initially open to any borrower but is now only open to first-time buyers.
However, in 2020 completions fell by five per cent, the value of the equity loans decreased by 0.5 per cent and the total value of properties declined by 0.05 per cent.
The firm added that it expected the decline to be even more acute in 2021, with a 10 per cent drop in completion, nine per cent fall in value of loans and total market value of properties down by 12 per cent.
Unlatch added that between Barratt, Persimmon and Taylor Wimpey the number of homes built under the scheme fell by 18 per cent between 2018 and 2020.
The research said that the percentage of total completions that Help to Buy homes account rose by 38 per cent in 2019 and 43 per cent in 2020.
Lee Martin, head of UK for Unlatch, said that the scheme had been “very influential” since its launch, but it was natural that the volume of homes built, and loans issued would tail off as the second phase comes to a close.
He said that this was due to borrower eligibility being limited to first-time buyers and the housebuilders winding down their output as the scheme is due to end next year.
Martin added: “Many buyer profiles were no longer meeting the new criteria of being a first-time buyer, hence divorcees and young second time buyers, to name just a couple, were having to look at other avenues available such as shared ownership schemes, which is becoming more and more popular with far less of a stigma associated to this buying facilitator.”
He added that the pandemic had also been a factor as it reduced property completions between 2019 and 2020.
Martin said that this negative trend had “very much reversed on the whole”, it remained to be seen whether Help to Buy completions would bounce back as the final deadline gets nearer.
“That’s not to say that demand has evaporated and it’s clear that Help to Buy remains a key focus for the nation’s biggest housebuilders. In fact, the level of Help to Buy homes as a percentage of all completions has actually increased during the pandemic, accounting for 48 per cent of output for the nation’s big three,” he added.
He concluded: “When the scheme does end, it will leave a sizeable hole in this respect, although this will no doubt be plugged by another government initiative focussed on fuelling buyer demand in order to keep market values buoyant.”
