Shares in the UK’s FTSE 350 housebuilders have risen after the government announced a £10bn injection into the Help to Buy scheme.
Persimmon’s share price rose by 3.8% in the first hour of trading, while Taylor Wimpey was up by 2.3% and Berkley was up by 2%.
The £10bn Help to Buy extension announced yesterday will benefit 135,000 households, which works out as £74,000 for each first-time buyer to get a mortgage with a deposit as low as 5%.
However, critics have said the policy will boost demand without increasing supply.
Neoliberal think tank the Adam Smith Institute said: “Reviving Help to Buy is like throwing petrol onto the bonfire that is the housing crisis.”
Rhys Moore, head of media, public affairs and campaigns at the National Housing Federation, said: “Housing associations could deliver 30,000 new affordable homes for every £1bn of public investment.”
Polly Neate, chief executive of housing charity Shelter, said: “Extending Help to Buy is the wrong priority at a time when over a million renters are struggling with crippling housing costs.
“Help to Buy has barely helped the first-time buyers it is targeted… It has increased house prices and propped up a speculative development model in need of reform.”
Research by Shelter earlier this year found that by increasing the number of people who can afford to purchase a property, the scheme had boosted mortgage lending volumes by 8.4% and added £8,250 to the average house price.
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