It will also help existing home owners with only a 5% deposit to move up to a larger new home. Not only does the scheme bridge the deposit gap, but it also makes buying a new home more affordable because the Welsh Government provides a 20% loan which is interest free for the first five years.
Buyers only need to borrow 75% of the purchase price from one of the participating high street lenders. The scheme will also boost housing supply in Wales. Last year only around 5500 homes were built compared to a need for 14000. The main constraint in supply in recent years has been people’s inability to buy – if people can’t buy, builders can’t build. By increasing demand, the scheme will directly lead to more homes being built, that itself will create vital jobs and boost the Welsh economy.
Speaking today, Stewart Baseley, Executive Chairman of the HBF, said:
“The scheme is great news for Wales. It will allow people who can afford to buy their own home to do by bridging the deposit gap and allowing people to buy with a 5% deposit.
The large deposits required in recent years to secure a mortgage have prevented many from buying – and as a result, builders from building. The Equity Loan scheme helps consumers overcome that deposit barrier and as a result the scheme will undoubtedly lead to an increase in house building - already we are seeing companies revise their projected build levels as a direct result of the scheme. This in turn will create jobs and deliver an economic boost.”
Mark Clare, Group Chief Executive, Barratt Developments plc added:
“In England, Help to Buy really boosted house sales and we are gearing up for a similar effect in Wales. With improving demand for new homes, we can increase the number of homes we build and we can open new sites. That’s a real boost for the local economy and will underpin new local jobs.”
Sean White, Taylor Wimpey MD of South Wales commented:
“As Help to Buy continues to prove tremendously successful in England and Scotland, we welcome the launch of the Government-backed initiative for homebuyers in Wales.
This is fantastic news for both first-time buyers and those looking to move up the property ladder – and it will also help developers to support the continuing growth of the housing market by delivering much-needed new homes across the country.
We have already received a significant number of enquiries about Help to Buy at our developments throughout Wales and we are very much looking forward to its launch.”
Glyn Mabey, Chairman of Persimmon Homes Wales, said:
“We are extremely pleased the Help To Buy scheme has finally been introduced in Wales. We’ve been working closely with the Welsh Government to achieve this for some time.
As a result of the scheme coming into operation we have launched a major recruitment drive to help us deliver 1,000 brand new homes across South Wales. We are recruiting for people to join our workforce immediately in all departments, from directly employed tradesmen, trainees and apprentices to senior managers."
Managing Director of Redrow Homes (South Wales) Stuart Rowlands said:
“Our sales teams across South Wales regularly meet with potential home buyers who just fall short of the requirements to secure a mortgage, in particular first time buyers. We have received numerous enquiries from house hunters wishing to purchase via the Help to Buy scheme, following its success in England. They have been disappointed to discover that it was not yet available to them in Wales.
The launch of Help to Buy Wales will provide thousands of individuals and families across the Country with the opportunity to own their own home, and will be a huge positive for the Welsh housing sector. The expected rise in demand will in turn increase the supply of new homes built, which is good news for the Welsh construction jobs and the economy as a whole.”
