End of help to buy ushers in new era for UK home buyers

Created: 14 Mar 2023

The Help to Buy equity loan scheme officially closes on 31 March 2023, ushering in a new era for UK home buyers. For first time buyers the government has introduced several schemes to help including Shared Ownership, Right to Buy, Lifetime ISA, and first-time buyer mortgages, among others. Greater affordability is evident with sellers accepting competitive offers and mortgage rates put pressure on prices.  

The Royal Institute for Chartered Surveyors (RICS) reported that the UK housing market is showing signs of growth, with an improvement in the new buyer enquiries from January to February 2023. However, RICS has also stated that prices are being agreed at prices below the asking prices, indicating a buyer’s market. House prices are expected to compress due to elevated mortgage rates, high inflation, and cost of living pressures.

A return to pre-Covid conditions is evident given trends which indicate a cooling of the market, particularly after two years of fervent activity stoked by the stamp duty holiday and rapidly rising prices. Brokers, estate agents, and realtors are reconfiguring their practices to close sales, with house prices falling by 1.1 per cent in February compared to the previous year. Sellers are accepting the largest discounts to asking prices since 2018 to lock deals in. 

Demand in 2023 is still 15 per cent above 2019 levels, according to Zoopla, with smaller properties and flats more attractive to buyers. The end of the Help to Buy scheme may make it more difficult for first-time buyers to get onto the property ladder, but there are plenty of other government schemes, cheaper mortgage deals available, and savings with the ongoing stamp duty cut. 

Housebuilders are ramping up the perks available to buyers, including furniture packs, stamp duty incentives and bespoke customisations at developments such as Bronze and Lu2on.

Online property portal Zoopla recently said sellers are having to accept an average discount to asking price of £14,000, or 4.5% as buyers push for better deals. Meanwhile, Rightmove said asking prices edged up by only £14 in January despite it being a traditionally busy time for the market.