Cushman-Wakefield-Q4-2022-BTR-Report

FEWER FIRST TIME BUYERS IN 2023

THE REMOVAL OF FISCAL POLICY WILL DETER FIRST TIME BUYERS Help to Buy was a government scheme that assisted buyers (f rst time buyers only from April 2021) to purchase a property , requiring just a 5% deposit . In England , the government o f ered equity loans of up to 20% outside London , and 40% within London . Buyers would then borrow the additional money from a lender . The equity loan meant f rst time buyers had a greater choice of mortgage products as they needed to borrow less from lenders . Since the scheme began in April 2013, it has helped 369,104 buyers ( from Q 2 2013 to Q 2 2022), of whom 84% were f rst - time buyers . Over the last three years , an average of 41,000 f rst - time buyers in England have used the scheme each year . Help to Buy applications closed at the end of October 2022, and the scheme will f nish at the end of March 2023. The end of Help to Buy will no doubt reduce the number of f rst time buyers in 2023, increasing demand for rental homes . THE END OF HELP TO BUY WILL IMPACT THE DELIVERY OF NEW HOMES One of the main reasons Help to Buy was introduced , was the need to boost the construction of new homes post - Global Financial Crisis . The scheme created demand for new build homes , leading to an increase in delivery . The growth in housebuilding created jobs and boosted local economies , just what was needed after the Global Financial Crisis . Help to Buy has accounted for 47% of all new build sales since April 2013. Without Help to Buy supporting the sales and purchases of new homes , there is a question around what will happen to new build delivery . What will f ll the gap ? The number of new build homes purchased using Help to Buy varies greatly by geography . Understanding where is most vulnerable to the end of Help to Buy can provide opportunities for investors . There will be locations with a strong pipeline of homes for private sale where economic headwinds will impact sales rates . Build to Rent has an opportunity to o f er alternate exit routes , in turn boosting rental supply .

HELP TO BUY EQUITY LOANS

22,000

20,000

18,000

16,000

14,000

12,000

10,000

Type something

8,000

6,000

4,000

2,000

0

Q 2 2021

Q 2 2017

Q 2 2015

Q 2 2013

Q 2 2018

Q 2 2016

Q 2 2019

Q 4 2021

Q 4 2017

Q 2 2014

Q 4 2015

Q 4 2013

Q 4 2018

Q 4 2016

Q 4 2019

Q 4 2014

Q 2 2022

Q 2 2020

Q 4 2020

Number of Help to Buy Purchases 369,104 84% Were First Time Buyers

Source: Cushman & Wakefield, GOV.UK

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