Yahoo Finance UK Help-to-Buy hotspots at risk of disappearing due to price caps
A third of first-time homebuyer hotspots in England will be negatively impacted by the Help-to-Buy price caps that will go into place in April 2021.
The UK launched the Help-to-Buy scheme in 2019 in an effort to boost home ownership by providing equity loans for newly-build houses worth up to £600,000 ($790,200), or 40% of the purchase price.
However, when the programme comes to an end in April 2021, it will be replaced with a new Help-to-Buy scheme, with regional price caps that range from £186,100 in the north-east to £349,000 in the south-west.
The exception is London, where the maximum loan will remain at £600,000.
But in many regions, these caps are actually less than the price of a new-build home — meaning they are likely to severely limit perspective home-buyers options or even their ability to get on the property ladder at all, according to analysis by money.co.uk.
Out of all locations in England, Central Bedfordshire has been the most popular place in the country for first time buyers to invest in a property through the scheme, since it began.
However, the average price of new build homes in Central Bedfordshire are in fact £1,234 higher than the £407,400 price cap being introduced in the region in April 2021.
Additionally, four other local authorities among the 15 most popular Help to Buy locations are estimated to be negatively impacted by the new price cap being introduced.
The average new-build home in South Gloucestershire is £4,270 more than the price cap.
Meanwhile, those in in Leeds cost about £19,355 more than the price cap allows.
And those in Cheshire West and Chester cost a massive £62,747 more, while those in Cheshire East are a whopping £103,304 more expensive.
What's more, the research found the average price of a new-build home within 13 cities across the country are significantly higher than their regional price cap – subsequently limiting property options for first time buyers within such areas.
The cities affected by the new regional price caps span all regions of the country, the data shows.
Cambridge is the city where first time buyers are set to struggle the most to purchase a home, as the average new build home costs £606,151— almost £200,000 more than the price that the government has capped the scheme within the east of England region.
Second on the list is the Yorkshire city of Ripon, where new-build homes cost £120,324 more than the price cap.
It is followed by York, where new-build homes cost £117,519 more, and Bath, where they are £111,002 more expensive.
Overall, new build homes in over a quarter (26%) of UK cities have an average new build-house cost above their regional price cap.
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