Good news for housebuilders as the PM announces a £10bn extension of the Help to Buy equity loan scheme. This announcement is particularly welcome after rumours of an early end to the scheme circulated in August, leading to share price falls for many housebuilders. Despite the broadly positive reception, some concerns remain over how effective the policy is at helping first time buyers get onto the property ladder.
The UK suffers from a housing shortage and correspondingly unaffordable housing prices. Fixing the problem with additional financing — even when it is restricted to new builds — may encourage some building at the margin, but must also drive prices further up.