Question to the Department for Levelling Up, Housing & Communities:

To ask the Secretary of State for Housing, Communities and Local Government, what assessment he has made of the potential effect of the regional price caps on the effectiveness of the new Help to Buy scheme in (a) England and (b) Stockport.

The new Help to Buy Equity Loan scheme will introduce regional property price caps which set the maximum purchase price in each region. For example, the cap for the North West is set at £224,400.

The regional caps are aligned to the first-time buyer market. They are all set at 1.5 times the forecast regional average first-time buyer price, in line with the Office of Budget Responsibility’s house price inflation forecast for 2021/22 as at Budget 2018, up to a maximum of £600,000 in London.

The caps were designed to support the purchase of properties that are more consistent with the wider first-time buyer market. This in turn helps optimise the resources available to enable purchasers to achieve the dream of home ownership. The Government has reviewed the caps and continues to be satisfied they allow good availability of first-time buyer type properties in each region

There will of course be local hotspots within each region that are more expensive. However, the approach is aimed at striking the right balance between better targeting the scheme so it can assist more first-time buyers, whilst accounting for a degree of price variation within regions without the additional complexity that may arise from more localised caps. Therefore, there are no plans to revise the caps.