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Essex: More Help to Buy sales in Colchester than Suffolk under flagship Government scheme

PUBLISHED: 18:47 03 September 2014 | UPDATED: 18:47 03 September 2014

The report, entitled East of England: Broken Market, said the housing crisis will only be solved if more affordable homes are built.

The report, entitled East of England: Broken Market, said the housing crisis will only be solved if more affordable homes are built.

Archant

More properties have been bought under the government’s flagship Help to Buy equity loan scheme in Colchester than the whole of Suffolk, new figures have revealed.

A total of 284 sales were completed in the first 16 months under the scheme in Colchester – one of the highest amounts in the country – compared to 248 in Suffolk.

The figure rises to 453 across north-east Essex, with 65 transactions in Tendring, 36 in Braintree and 68 in Chelmsford.

In comparison, there were only 20 sales in Suffolk Coastal, 24 in St Edmundsbury and 34 in Ipswich.

Alex Leader, of the Ipswich branch of estate agents Savills, said: “The figures aren’t any real surprise really as there is more development activity in Essex than Suffolk primarily down to value.

“Colchester especially has a vast amount of new build developments which is evident in the figures.”

The Help to Buy equity loan scheme was launched in April last year and is specifically aimed at people buying a new build property worth up to £600,000.

Someone taking out a loan under the scheme can get a loan from the Government for up to 20% of the property price. With the borrower also putting at least 5% in, they would need a mortgage of up to 75% to cover the remainder.

Critics say the scheme will drive up prices by increasing housing demand without stimulating the supply of new properties, fuelling a new house price bubble.

They have called on the scheme to be made less generous to cool Britain’s housing market. Average house prices in the east of England rose to a new record high in May, up to £273,000. It is 235,344 in Suffolk and £283,559 in Essex, according to property website Zoopla.

Chancellor George Osborne has extended the scheme until 2020 amid growing pressure to pull the plug on the scheme.

Yesterday he claimed the scheme remains a “key part” of the government’s economic plan. He argued it supports families, drives up house-building, boosts the construction industry and increases housing supply.

The Bank of England is due to review Help to Buy this month, and can make recommendations to change or close the scheme.

Mr Leader added: “The extension of Help to Buy Equity Loan scheme to 2020 will continue to support the sale of new build, particularly in lower value markets where the initiative has had the greatest impact so far.

“The appeal of buying new build through the scheme could increase should credit conditions tighten as a result of the Mortgage Market Review.

“While the extension of Help to Buy has given the opportunity to plan ahead, the government still needs to address how the scheme will end. Tapering remains the best option.”

David Orr, chief executive of the National Housing Federation, added: “The initiative supports demand but we need the Government to do something big and bold to support supply and help end the housing crisis within a generation.”

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