George Osborne confirmed in his annual Budget on Wednesday that the government would extend the equity loan portion of the Help to Buy scheme for four years longer than planned to 2020, a move he said would deliver 120,000 new homes.
In response, Barratt Developments, Britain’s largest housebuilder by volume, said it plans to hire 3,000 more workers as it anticipates increasing the number of sites it is working on to 450, from the current 380.
Smaller housebuilder Crest Nicolson said it would be setting up a third, new business in the area around London, which could add up to 600 homes a year to its completion rates once it is fully up-and-running.
Barratt’s chief executive, Mark Clare, said: “As the land we are buying today is for the homes we will be building in 2016 and beyond, the industry needed a longer term framework for Help to Buy.”
Crest’s chief executive, Stephen Stone, said the extension would help to underpin demand for new homes for the next six years “and that gives us the confidence”.
The Help to Buy scheme has greatly benefited UK housebuilders by accelerating the nation’s housing recovery and shoring up demand to boost selling rates and profits.
It has also allowed a number of players such as Persimmon and Taylor Wimpey to unveil plans to hand out cash to shareholders.
The extension of the scheme also illustrates how the debate over Britain’s housing shortage has crept to the top of the political agenda, with a general election just over a year away.
Crest said in a trading statement that its forward sales for 2014 and beyond totalled £330 million, a 50 per cent increase on this time last year. Some 58 per cent of reservations had been taken in respect of forecast 2014 legal completions, it added.