Buying schemes remain in high demand but short supply across England
The latest research from Yopa, the full-service estate agents, reveals that whilst buying schemes designed to to help homebuyers onto the ladder are in high demand, the stock availability of properties with such offerings is low.
Yopa has analysed the current market for for-sale housing stock in England, looking at what proportion of homes currently listed for sale boast the added benefit of a buyer scheme and what level of buyer demand there is for these properties based on the proportion that have already been sold subject to contract.
Buying schemes refer to various government and industry initiatives that help people to purchase homes, including Shared Ownership, the First Homes scheme, and deposit assistance schemes such as Deposit Unlock.
Yopa’s research shows that buying scheme availability in today’s market is low. Across England, just 2.3% of available homes are available through such a scheme*.
The South East presents homebuyers with the best opportunity of securing a property with a buying scheme, but even so, such properties still account for just 3.4% of the region’s current market. The East of England and South West also promise above-average opportunities with buying scheme stock accounting for 2.7% and 2.4% of all local for-sale properties respectively.
While stock levels are low, further analysis from Yopa suggests that this is not a result of low buyer appetite for such opportunities. In fact, across England, 30.6% of buying scheme homes have already been snapped up.
Demand climbs as high as 41.6% in the West Midlands, followed by the North West (40.4%), North East (37.8%), and East Midlands (37.3%).
A surplus of first-time buyers
Buying schemes are, by and large, designed to assist first-time buyers in particular, providing a more affordable and accessible way for people to get their first foot on the ladder.
However, Yopa’s insight reveals that far too few buying scheme properties come to market to get anywhere close to satisfying potential demand.
Across a full 12 month period, an estimated total of almost 50,000 (46,903) buying scheme homes are expected to be made available on England’s market*. However, the number of first-time buyers in a year is estimated to stand at 261,859*. As such, there are only enough buying scheme opportunities to satisfy 17.9% of first-time buyers in a year.
However, first-time buyers in some regions stand a much better chance of securing a buying scheme property. In the East of England, there are enough buying scheme homes to account for 48.1% of first-time buyers. Well over a fifth of first-time buyers can also be matched with a buying scheme in the South East (26.5%), and South West (22.3%).
CEO of Yopa, Verona Frankish, commented:
“Year after year, we continue to see strong demand for homes sold via buying schemes, particularly among first-time buyers who would otherwise struggle to take that crucial first step onto the property ladder. However, supply simply is not keeping pace with this demand.
It remains highly unlikely that house prices will see any meaningful decline in the mid-term and it is therefore unlikely that affordability will improve significantly. As a result, buying schemes are set to remain a go to option for many aspiring homeowners.
The key question is whether the government and new-build developers will choose to extend greater support to these buyers, or whether the focus will remain solely on delivering more homes. While increasing housing supply may help to moderate price growth, it does little to address wage growth and affordability, and it is unrealistic to expect housebuilding on a scale large enough to drive prices lower.
For these reasons, buying schemes will remain a vital part of the housing market, helping people move out of the rental sector and into the longer term security of home ownership.”
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