STRONG take up of the Government’s Help To Buy housing scheme is boosting home sales in the North and helping to redress the North South divide, according to housebuilder Redrow.
The firm said that over 50 per cent of its Help to Buy home sales over the past year were to people in the North, showing that the Government scheme is providing assistance where it is most needed.
Redrow’s chairman and founder Steve Morgan said: “It’s very encouraging that areas like Yorkshire have benefited.
“The North took quite a bashing in the recession. There are whole parts of the North where prices are still below what they were in 2007.
“The fact that the North makes up 50 per cent of output shows that Help to Buy is getting to where it’s needed the most.”
He was speaking yesterday as the group announced record annual results and said the market has returned to a more normal selling pattern, quelling fears that the property market might overheat.
Redrow, which has a number of schemes in Yorkshire including three sites Wakefield, two in Horsforth, two in Newton Kyme and developments in Huddersfield, Barnsley and Steeton, said pre-tax profits soared 91 per cent to £132.6m in the year to June 30, spurred by the UK government’s Help-to-Buy housing scheme and strong consumer sentiment.
Redrow said the Bank of England’s decision to introduce new rules to help curb the surge in Britain’s housing market and limit mortgage lending had moderated the market, forcing housing activity back to a more seasonal pattern.
The Bank said in June it would cap mortgages worth 4.5 times a borrowers’ income from October and that the changes will apply to 85 per cent of total new home loans.
Redrow’s chief executive John Tutte said: “A year ago we went through an extraordinary period after Help to Buy.
“Last summer was almost unique. The peak we saw in the spring went through the summer.
“We’re satisfied we’ve returned to a more seasonal trend. We welcome a bit of moderation in the market. We’re expecting sales rates to moderate as Help to Buy settles in. It looks a lot more stable and steady.”
Redrow reported a 13 per cent increase in average selling price to £239,500 over the past year.
As a result of the buoyant market the group increased its workforce by 21 per cent, creating 230 full-time jobs.
Help to Buy represented 35 per cent of Redrow’s private completions during the year.
The scheme helps people buy homes worth up to £600,000 with a deposit as low as five per cent, largely to encourage first-time buyers to get on the property ladder.