House-building faces cautious optimism

The fact that the government has brought in schemes to the housing market to try to facilitate the growth of the home building industry across the country has meant that more properties for sale are now becoming available at lower prices.

This could mean that the industry itself may see a boost with a greater demand for homes.

Under schemes such as NewBuy and FirstBuy, which the government released earlier this year, homebuyers are able to bring themselves onto the housing ladder without the sizeable barrier of an expensive down payment.

While in the past, a deposit would have cost them between 20 and 25 per cent of the value of their property, it is now the case that buyers on these schemes can get a foot on the bottom rung with a deposit of just five per cent, with extra funding being provided both by the government and housebuilders.

This has meant more new houses are being built according to LSL property Services. It said that in the year up until April 2012, there have been more sales because the cost of these types of homes has dropped greatly in all regions of the UK over the course of the past 12 months.

Steve Turner, head of communications at the Home Builders Federation (HBF), said that there is a chance that this could lead to more homes being built over the course of the next months and years.

"We have seen some positive initiatives, such as NewBuy, that are helping to address the mortgage situation but there is still a long way to go.

"NewBuy is certainly positive. If that can deliver the tens of thousands of sales over the next couple of years that we hope it will, then clearly that is going to have an impact."

He said that growth also needs banks to take more of a chance when it comes to lending to help boost homebuilding.