How Help to Buy has boosted the UK Economy
St Charles Homes’ participation in the Government’s Help to Buy scheme has given numerous buyers at Kidderminster's Castle Locks development an exciting opportunity to purchase their ideal first home. As buyers only require a five per cent deposit on the property they wish to purchase, Help to Buy has been incredibly valuable in giving the UK’s housing market, which suffered drastically during the recession, a jump start whilst allowing buyers to put down secure roots without having to take out risky loans.
However, it is not only the housing market and the nation’s prospective home owners which benefited as a result of Help to Buy, as the boom in new house builds are now supporting a variety of businesses in numerous sectors of the British economy. From DIY stores to construction firms, to insurance brokers and estate agents, the scheme has proven to be a key driver of growth in a country which only two years ago was struggling amidst the longest recession in 50 years.
Retail Industry Benefits
The retail industry was one of the areas of British business worst hit by the recession, as the number of high profile store closures on the High Street can attest to. Even now, brand administrations and shareholder buy outs remain a grim fact of life for many, with others struggling to lift profits urgently required to capitalise on the upswing in consumer confidence seen this year. However, according to the British Retail Consortium (BRC), DIY stores and home ware retailers are faring better than most – largely as a result of the buoyant housing market triggered by the Help to Buy scheme. Senior analyst at the BRC, Anne Alexandre, says; “The online performance of furniture and flooring went from strength to strength in the past few months. In February, online furniture and flooring posted its highest growth, contribution to monthly growth and penetration rate since our series began.” This growth is contributing hugely not only to the retail industry, but to the British economy as a whole – demonstrating the widespread positive effect Help to Buy is having upon the UK.
Brokers and Builders
The construction industry has also benefited hugely from Help to Buy, as demand for new homes is creating opportunities and employment within the housebuilding sector. Furthermore, this is expected to steadily increase as the government continues to channel investment into programmes encouraging UK citizens to buy new homes, especially in areas of high demand such as London and the South East. In turn, mortgage and insurance brokers are benefiting from an increase in custom which is helping to boost local economies in all regions of the UK – sales for home insurance NI, for example, have risen sharply as homeowners seek to benefit from the recoveries ongoing in both Great Britain and the Eurozone, including in neighbouring Eire. The one issue which remains in the way of strong growth is an unwillingness by banks to lend to both individuals and smaller firms, as they remain wary of avoiding another credit crunch, but an increase in competition in the financial sector from alternative lenders such as building societies is slowly negating this problem.
Local Communities
Yet the benefits of an increase in housing demand are not simply felt by businesses within the financial, construction and retail industries – entire communities stand to win out in this situation. With an increase in population, local authorities receive a higher volume of council tax which can be invested into local services such as road maintenance and rubbish collection, whilst smaller businesses in the area such as pubs and corner shops have a wider consumer pool to attract. This last point is especially pertinent given the struggles faced recently by the pub industry, with the Campaign for Real Ale (CAMRA) warning that closures nationwide remain at a worrying 18 per week. Those who invest in a home also invest in their local community, thus shouldering some responsibility for valuable amenities and providing custom for a wide range of businesses. Of course this housing boom may have its downsides, as it may lead to a housing bubble if prices increase, but at the end of the day the benefits Help to Buy is providing for local economies is invaluable.