Lloyds Banking Group homes and lifestyle director Stephen Noakes says 30 per cent of new-build construction is reliant on the first part of the Help to Buy scheme.
Speaking at a housing fringe event at the Labour conference in Manchester last week, Noakes said the equity loan part of Help to Buy accounts for up to 6 per cent of Lloyds’ mortgage lending.
The Help to Buy equity loan scheme was introduced last year to offer buyers a 20 per cent Government loan to buy new-build property up to 95 per cent loan to value. It was due to expire in 2016 but has been extended until 2020.
Noakes, who is also chairman of the Council of Mortgage Lenders, says: “Help to Buy has helped quite considerably in new build construction. The industry view is that it supports about 30 per cent of current building activity.
“The reason the equity schemes are in existence is affordability and whether the normal mortgage market supports new build. There has been some paucity of mortgage finance on new build.
“It is also about finding different solutions to make the affordability for home ownership accessible for a broader part of the population. Lloyds now lends up to 90 per cent on new build and second hand.
“The reason there was a period with inequality on mortgage finance with new build versus second hand was because of some of the risk concerns from lenders after the crisis. The work between the CML and Home Builders’ Federation has largely taken those problems away.”
Labour MP Graham Jones says: “I’m not sure Help to Buy will increase the supply of homes, it is a demand-side led solution which is a bit risky.”