Help to Buy has improved social mobility and has allowed first-time buyers to get an all-important first step on the housing ladder, David Cameron said yesterday.
The Prime Minister praised the scheme for helping hardworking people to own their own home.
“Without Help to Buy, we were beginning to see a country where only people who had wealthy mums and dads who could give them the money for their deposit were able to buy a flat or a house,” he said.
Help to Buy has supported over 2,300 successful applications in its opening month, according to participating lenders. It has generated new mortgage lending worth £365 million (read more).
Over three-quarters of applicants are first-time buyers, while the vast majority of applications have originated from locations outside of London and the South East.
Ben Thompson, Managing Director of Legal & General Mortgage Club, said the figures showed a housing market "moving at different speeds", adding that "a real need for assistance remains in many regions".
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Demand Driving Up Prices
Concerns remain, however, that the scheme will push house prices out of the reach of those it is designed to support.
Increasing numbers of surveyors have reported rising house prices across the country.
The Office of National Statistics says that annual house price inflation rose to 3.8% in September, but it pointed out the wide disparity between different areas of the UK.
Prices fell by 1.1% in Scotland and 1.5% in Northern Ireland but rose by 9.4% in London, it said.
The Royal Institution of Chartered Surveyors said that measures needed to be taken to prevent "soaring" demand from outstripping supply.
Further concerns have been raised that a housing shortfall is growing in the capital, where developers have become more concerned with high-end prime properties for wealthier buyers than affordable housing for average earners.
The growing affordability gap in London could force businesses away from London, warned leading property agency Savills, as fewer employees are able to afford suitable accommodation within commuting distance of their workplaces.
Help to Buy Still Helpful
Mr Thompson said the Help to Buy scheme was important for less heated regions, but added that the supply of housing had to remain a top priority.
"While concerns persist about a bubble forming in and around the capital, things are not as buoyant in other parts of the country," he said.
"The long term issue of housing supply must stay top of the political agenda. Although house builders are projected to build 170,000 more homes a year in the next 2-3 years it is still not enough to meet the chronic undersupply the UK faces.
"This problem needs to be solved if a healthy equilibrium is to be restored and we are to create a housing market that is sustainable in the long-term."
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