Help to Buy house prices have overheated by £63k

March 7, 2019

Help to Buy house prices have overheated by £63k & could leave FTBs in Government induced negative equity!

The latest research by for sale by owner website, www.OkayLah.com, has revealed how the Government’s Help to Buy scheme has hugely overheated and while the big house builders that have taken advantage of the scheme have made huge profits, a collapse could leave hundreds of thousands of homeowners in negative equity.

OkayLah.com looked at the number of Help to Buy completions each quarter since Q2 of 2013 and the total sold value of those Help to Buy properties to ascertain the price of the average Help to Buy property in each quarter. They then compared this to the average first-time buyer house price from the Land Registry to see how prices differed for those using the scheme.

In Q2 of 2013 when Help to Buy was introduced, the average first time buyer house price was £197,000, with the price paid per a Help to Buy property just £186,091, making them over £10,000 better off as a result of using the scheme.

But by Q3, this had fallen to just over £6,000 better off, with a complete turnaround coming by Q4 with the average Help to Buy house price exceeding that of the average first-time buyer by £7,714.

Fast forward to 2018 and a sector suffering from a lack of supply but bolstered by this huge spike in demand as a result of the Government’s ‘helping hand’ is now vastly out of kilter with the rest of the market.

Today the average first-time buyer house price is £236,000, however, those buying through the Help to Buy scheme are forking out a staggering £298,927 – a different of £62,927.

This deficit has been increasing each quarter and the now leaves many in danger of negative equity should the housing bubble burst and prices plummet.

Founder and CEO of www.OkayLah.com, Paul Telford, commented:

“It’s quite astonishing how out of shape the Help to Buy scheme now looks against the backdrop of the rest of first-time buyer market across the nation. While it was implemented with the best intentions and initially did serve as intended, the consequences of further fuelling demand in an area of the housing market that was already in desperate need of additional stock is plain to see.

What’s perhaps more alarming is that as much as half of the £1bn or so made by the nation’s biggest house builders has come from the Government subsidised scheme and essentially straight out of the pocket of taxpayers.

Not only has this pushed Help to Buy prices up massively, but it leaves those buying through the scheme on vary precarious ground. While we are unlikely to see a market crash despite the slowdown caused by Brexit uncertainty, a notable softening of property values would leave many in negative equity when considering their Help to Buy property within the wider landscape of the first-time buyer market climate.”

Quarter
Completions
Value of Equity Loans (£m) at completion1
Total value of properties sold (£m)2
Avg price paid per H2B property
Avg UK FTB House Price*
Help to Buy ‘Premium’ (£)
Help to Buy ‘Premium’ (%)
2013
14,023
566.15
2,840.37
Q2
2,103
78.09
391.35
£186,091
£197,000
(£10,909)
-6%
Q3
3,944
156.24
784.31
£198,862
£205,000
(£6,138)
-3%
Q4
7,976
331.82
1,664.70
£208,714
£201,000
£7,714
4%
2014
28,376
1,226.04
6,160.42
 
Q1
5,581
235.21
1,181.89
£211,770
£205,000
£6,770
3%
Q2
8,775
380.81
1,913.72
£218,088
£210,000
£8,088
4%
Q3
5,846
252.67
1,269.99
£217,241
£218,000
(£759)
0%
Q4
8,174
357.36
1,794.82
£219,577
£209,000
£10,577
5%
2015
31,827
1,469.26
7,399.13
 
Q1
4,929
215.84
1,085.28
£220,183
£212,000
£8,183
4%
Q2
9,355
429.76
2,163.86
£231,305
£212,000
£19,305
9%
Q3
6,898
319.26
1,608.46
£233,178
£219,000
£14,178
6%
Q4
10,645
504.4
2,541.54
£238,754
£217,000
£21,754
10%
2016
38,383
2,094.12
9,889.73
 
Q1
6,788
329.15
1,652.41
£243,431
£223,000
£20,431
9%
Q2
10,814
583.66
2,787.65
£257,782
£220,000
£37,782
17%
Q3
8,542
474.03
2,210.02
£258,724
£226,000
£32,724
14%
Q4
12,239
707.29
3,239.65
£264,699
£225,000
£39,699
18%
2017
46,300
2,911.44
12,995.36
 
Q1
8,212
504.31
2,226.81
£271,165
£221,000
£50,165
23%
Q2
13,863
870.61
3,884.48
£280,205
£228,000
£52,205
23%
Q3
10,233
659.66
2,921.47
£285,495
£229,000
£56,495
25%
Q4
13,992
876.86
3,962.60
£283,205
£225,000
£58,205
26%
2018
36,310
2,397.73
10,601.71
 
Q1
10,170
665.81
2,934.05
£288,500
£227,000
£61,500
27%
Q2
14,950
967.06
4,322.67
£289,142
£232,000
£57,142
25%
Q3
11,190
764.85
3,344.99
£298,927
£236,000
£62,927
27%

 

Properganda PR

National and local media coverage for property businesses. Journo quotes delivered in minutes.

You May Also Enjoy

Breaking News

Breaking Property News 3/9/26

Daily bite-sized proptech and property news in partnership with Proptech-X.   The imminent interest rate hike is going to be a real reckoner for property   When interest rates rise again, Britain’s housing market will discover what it is really worth   Thought Leadership by Andrew Stanton CEO Proptech-PR For more than a decade, Britain’s housing…
Read More →
Breaking News

Tenancy deposit reform overlooks estimated £750m

As the Government considers reforms to England’s tenancy deposit system, The Letting Partnership is warning that one major question remains almost entirely absent from the debate: what happens to tenancy deposits that are never reclaimed? While current discussions have focused on how deposits should be protected in future, namely custodial vs insured schemes, far less attention…
Read More →
Breaking News

Application to offer in 24 hours with new Barclays Fast-Track Remortgage

Barclays launches first-of-its-kind Fast-Track Remortgage, which can provide eligible customers1 a mortgage offer within 24 hours, and completion in as little as five days Research finds those who have switched lenders are twice as likely to find the process difficult compared to those who stayed with their lender (20 per cent vs 10 per cent)…
Read More →
Estate Agent Talk

Mortgage overpayments in a confident market

Financial experts are encouraging homeowners and first-time buyers to take a fresh look at mortgage overpayments as confidence builds in the UK property market and interest rates begin to ease. With major lenders cutting rates, improved loan-to-value options for buyers, and growing optimism in the 2026 market, mortgage overpayments are emerging as a powerful and…
Read More →
Breaking News

House price growth remained subdued in August

UK annual house price growth remained broadly stable in August at 1.6% House prices were up 0.2% month on month Headlines Aug-26 Jul-26‡ Monthly Index* 550.1 549.1 Monthly Change* 0.2% -0.1% Annual Change 1.6% 1.4% Average Price (not seasonally adjusted) £275,465 £276,581 * Seasonally adjusted figure (note that monthly % changes are revised when seasonal…
Read More →
Letting Agent Talk

What Adds Three Weeks to Leasehold Conveyancing?

As government reforms target a four-week reduction in homebuying times, Konnect You analysis points to management packs, extra lease enquiries, third-party responses and title issues as recurring leasehold bottlenecks. The government is targeting a reduction of around four weeks in the homebuying process through reforms published in June 2026. Its roadmap proposes more property information upfront and recognises that leaseholders can face delays…
Read More →