Suffolk/Essex: Flagship Help to Buy mortgage scheme off to a stuttering start in the region
- Credit: PA
Fewer than 70 new homes have been bought in Suffolk as a result of the initial six-month phase of the Government’s flagship Help to Buy scheme.
Only 64 sales of new-build properties were completed in the county in the first six months of the controversial mortgage guarantee scheme, under which people can buy properties worth up to £600,000 with a deposit of only 5%.
In Suffolk, Waveney had the fewest sales with just one while Ipswich was second-bottom with eight – a sale nearly every three weeks on average. The highest was Mid Suffolk with 18. The national average was 19.
In north-east Essex, Braintree and Chelmsford both had zero sales. Colchester was highest, with 45, while Tendring had 11.
Leeds was the highest in the country with 104. Prime Minister David Cameron said earlier this month Help to Buy was helping the “hard-working people” it was aimed at.
But critics say the scheme, to be reviewed by the Bank of England’s Financial Policy Committee in three years, will drive up prices by increasing housing demand without stimulating the supply of new properties, fuelling a new house price bubble.
Figures in August showed house prices in East Anglia were increasing the fastest in the country, up 7.6% to £236,371, an increase of £17,000 in a year. Ipswich MP Ben Gummer said developers likened acquiring planning permission from Ipswich Borough Council (IBC) to “walking in treacle”.
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“This council is famous for being slow and placing unrealistic demands on developers which have resulted in these figures,” he said. “If you have a clonked-up approach to planning which this council has shown then this is the effect. They have got to start giving permission quickly and without putting impossible demands on developers.”
Alex Leader, associate director at estate agents Savills, also called on the council to ease planning restrictions.
“Ipswich has got a restrictive amount of new-build going on which means we are not going to contribute to these statistics,” he said. “I am a big fan of Ipswich but we need to sell it as a destination town. We have a low crime rate, we’re an hour from London, 10 minutes from a great coast, have a university – but we need new companies, a better night-time economy and need to do up the town centre.”
“Colchester Borough Council has been unlocking land for development potential over the past five years. We have been a little bit slow and need to get building in Ipswich.”
David Ellesmere, leader of IBC, said: “Having to find a 5% deposit is obviously better than a 25% deposit but if house prices are £160,000 that is still a lot of money for a first-time buyer to find.
“The real problem is that not enough new houses are being built. That is why we are building new council houses for the first time in 20 years [120 homes on three plots of land] and why we are pressing ahead with a masterplan for north Ipswich so that house building can start there.”
The average equity loan was £31,780 in Ipswich, below the national average of £38,703. It was £40,514 in Suffolk.