The Help to Buy scheme has not inadvertently pushed overall property prices up in the UK but has led to an increase in new homes, according to new figures from the Government.

The equity loan scheme helps first-time buyers save for a deposit. There were fears when it was introduced in 2013 that it could cause house prices to rise further.

But a Government report found little evidence it has pushed up house prices. It claims the scheme is boosting confidence among consumers, developers and lenders.

Building new homes

The report says 43% of Help to Buy homes would not have been built if not for the scheme, while 82% of owners who bought a new home under Help to Buy could only do so because of the scheme.

Housing minister Brandon Lewis says Help to Buy, along with other policies, has got “the country building again”.

He says that the number of new homes has increase by 25% in the last year alone.

NHBC data backs up his claim, with figures showing registrations for new homes were at their highest level since the 2009 crash in January 2015.

Questions raised

Opposition politicians have raised questions over Mr Lewis’ claims.

Labour says the Government initiative has actually only provided the housing industry with a "modest boost" and claims the number of home-owners has been in "free fall" since 2010.

Stephanie McMahon, Head of Research at Strutt & Parker, said: “As the report states, Help to Buy still impacts  a relatively small number of house purchases, 2% to 3% of total residential property transactions in England on a monthly basis. Looking at the data in greater detail, and concentrating only on England (as per the DCLG report) the greatest beneficiaries of the scheme have been in metropolitan areas beyond London and the South East such as Birmingham, Leeds, Wigan and Sheffield, indicating that some of England’s most unaffordable areas have not benefitted.”

John Healey, shadow cabinet minister for housing and planning, says many young people are still struggling to get on the housing ladder.

Research shows that the average applicant to the scheme earns almost £50,000 – well above the UK average salary of around £26,500.

Mr Healey says home-ownership is still out of reach for those on low and middle incomes.