Bank vindicated on Help To Buy

The Bank of England (BOE) will be pleased with the way it’s flagship scheme is working in the North East and the Midlands. Despite calls from many property experts to withdraw the scheme the bank has stuck to it’s guns and said that it has no intention of withdrawing the scheme.

Despite record house prices in the south-east, house prices across the Midlands and the north-east have fallen for the second month in a row. This is despite the popularity of Help to Buy in these areas which has soaked up most of the money allocated for the scheme.

House prices down in the Midlands

Very few sales have taken place in the south-east but the Midlands has seen a high level of buyers taking advantage of the taxpayer backed scheme. so the question is what would be the impact on these areas if the scheme was withdrawn completely.

The BOE has always said the the huge increases seen in London and the south-east has not been caused by HTB and these new figures will show that they have been proved right. They came under a lot of pressure in the spring as prices in London were up 18% in 12 months. Many experts have been banging on about HTB and blamed the bank for the increases.

The fact is that very few buyers in London have used the HTB and the average purchase price of a home when using the scheme was as little as £158,000. As most people will know this will not even buy you a studio flat in London. The bank have argued that HTB is there to help buyers get onto the housing ladder and it would appear that that is exactly what is happening and that the Midlands and the North East would have seen steeper falls were it not for the scheme.