The health secretary, Matt Hancock, said last week that the government planned to increasingly target the source of outbreaks with local lockdowns. But councils in regions where the latest estimates indicate the virus may be starting to spread again have told the Observer they are in no position to order people to stay at home. 

Modelling by Public Health England and Cambridge University reveals that the reproduction rate [R number] of the virus in the north-west has reached 1.1, which could mean the number of new infections is growing in the region. Blackburn and Darwen Council, which runs 85 schools in Lancashire, contacted heads this weekend to advise them not to reopen on Monday due to concerns over the local R rate. Many have now contacted parents to say they will be keeping their doors closed to all but children of key workers.

The Greater Manchester mayor, Andy Burnham, said the government had eased restrictions too soon, without a fully operational test and trace system in place. “It is very worrying,” he said. “There has been a significant rise [in the R rate]. It is heading in the wrong direction.”

However, he said councils wouldn’t be able to ask people in Greater Manchester, where there are over 10,000 confirmed Covid-19 cases, to stay at home without a local furlough scheme to ensure families had enough to live on. “You can’t just say to people in a designated area ‘you cannot go to work’. A lot of people would not be able to afford to do that,” he said. “That is just one of the implications of a local lockdown policy. We need clear answers quickly. All the government has done is throw an idea out there without the accompanying detail.”

Burnham added he would only consider such a measure if all else had failed and ministers demonstrated they were not trying to pass the buck. “I would need to be convinced that it isn’t just a lazy way for national government to dump its problems on local government, he said.”

The other region in England where the virus infection rate is growing is the south-west. Although it has the lowest number of cases in the country, the PHE and Cambridge University team calculated it might currently have a reproduction rate of one.

North Somerset Council has experienced a recent spike in infections, following an outbreak in Weston General Hospital in Weston-super-Mare, although PHE analysis suggests this has not spread into the wider community. Hancock twice claimed on Friday that a successful local lockdown had been in place in the seaside town over “the past weeks”. But Mike Bell, the council’s deputy leader, said Hancock was being misleading because only the hospital was shut, with new patients sent elsewhere since the 25 May. “What most people understand by a local or regional lockdown is that we go back to the days when we can’t go out and we can’t travel freely. That absolutely did not happen in Weston-super-Mare,” he said.

He added he did not have powers to impose a local lockdown in the town if it ever became necessary. “In terms of forcing people to stay at home, forcing businesses to close, we haven’t got the powers to do that,” he said.

Bristol’s deputy mayor, Asher Craig, said the council would be prepared to lock down the city if the threat increased substantially. Despite a rising R rate, Bristol has a lower than average number of cases, with 153 infections per 100,000 people. “If it worsened, we would have to lock down,” she said. But she added that the city lacked the necessary powers and was facing a growing deficit amid falling revenues.

Sunderland has the highest rate of infection in the country, with 448 cases per 100,000 residents. Although the latest reproduction rate suggests the virus is starting to recede in the north-east and Yorkshire, many fear a resurgence. The council leader, Graeme Miller, said : “How can we possibly be opening society up when this this infection rate is so stubbornly high across the country?”

A government spokesperson said that the new test and trace service would play an important role in limiting the spread of the virus.

 “As always has been the case, a specialist team from the local authority or PHE manages any local outbreaks and we are making £300 million available to local authorities to develop local outbreak control plans.”

More than two thirds of those who tested positive for coronavirus had no symptoms, in the first nationally representative sample.

The Office for National Statistics (ONS) said the figure underlined the importance of social distancing to avoid catching the virus from those who felt well, amid warnings that the scale of infection without symptoms could make the NHS contact tracing system much less effective.

However, other experts cautioned that many of the test results could be false positives, caused by the inherent difficulties of checking people at random for a disease that fewer than one in 400 people has at present.

The results also show that only one in 15 people had antibodies, indicating that they had recovered from corona–virus, dealing another blow to hopes that herd immunity would end the epidemic without the need for a vaccine or treatments.

The report, titled Too little, Too late? Housing for an ageing population, by the Cass Business School, the Association of Retirement Community Operators and the Centre for the Study of Financial Innovation, said investing in homes for the elderly would encourage downsizing and free up family homes.

The research found there are 15m bedrooms surplus to requirements across UK homes. This will exceed 20m by 2040, with nearly 13 million people above the age of 65 living in largely unsuitable households. The report also found that nearly 9m households aged over 65 live in a house with ‘surplus’ bedrooms.

Only 2.5% of the UK’s 29m dwellings are defined as retirement housing, but the number of purpose-built homes offering care services is far less, at around 0.7% of UK housing stock.

The report found that just 7,000 new homes built each year are designed for older people. This, it concludes, is “insufficient to serve the 180,000, 65-plus households that will be created each year over the next decade”. 

Eugene Marchese, co-founder of Guild Living, which is developing purpose-built housing for older people in town centres, said: “This welcome report lays bare some stark figures on how much housing is being wasted and how far behind Britain is when it comes to providing the right amount of age-appropriate accommodation.

“This is about one thing: helping older people live better,. Most people have no real understanding of ‘later living’ – but the Covid-19 crisis has woken everyone up to what happens when we ignore the question of ‘how do we want our parents to live?’”

Félicie Krikler, director at Assael Architecture, said: “As this report makes clear, households have been shrinking in size for four decades, but the way we design new homes has failed to keep pace. Our planning system must recognise that well-designed later living housing can transform our lives as we get older by allowing us to age better.

“This is not only by supporting mobility but also by creating aspirational housing that people choose to move to, not because they have to, and intergenerational places with shared services that sit at the heart of their community.”

A statement from the Ministry for Housing, Communities and Local Government said: “We are ensuring more people than ever before can access a safe, secure, affordable place to call home. This includes helping older people make informed choices about the sort of housing that meets their aspirations. 

“Many older people are already benefiting from the more than 460,000 affordable homes we have delivered since 2010. Others are being supported to stay in their own homes. We have also strengthened planning policy to make it clear that we expect all councils to have policies in place for addressing the housing needs of older people.”

Public Health England (PHE) has given a regional breakdown of the coronavirus transmission number, or R value, with the latest estimate showing it is around one in the North West and South West regions of England.

PHE said latest estimates, worked out in conjunction with Cambridge University’s MRC Biostatistics Unit, show it is highly likely that R is below one in each other region of England.

The brand-new analysis shows that the North West now running above that at 1.01, the highest in the country, up from 0.73 a few weeks ago when the data was last released.

The South West is listed as exactly 1, meaning it is the second highest R value in England, although the researchers believe the number of new daily infections in the region to be ‘relatively low’.

This comes as lockdown restrictions continue to be eased across England, meaning more and more people are returning to work, and some children have returned to school.

People have also recently been given governmental permission to meet with up to five others from different households, in the latest easing of the lockdown restrictions which has seen many people’s social “bubble” expand.

The South West is followed by the South East on 0.97, London on 0.95 – a huge increase from its last value of 0.4 – and the East of England on 0.94.

It measures the number in the Midlands to be at 0.9 and in the North East and Yorkshire, which previously had the highest R value, at 0.89.

Dr Yvonne Doyle, PHE medical director, said: “Our estimates show that the regional R numbers have increased although they remain below one for most of England – this is to be expected as we gradually move out of lockdown.

“It is vital that everyone continues with social distancing, practising good hand hygiene and must remain at home and order a test if they have symptoms.”

Sir Patrick Vallance, The government’s chief scientific adviser has also chimed in to the conversation, also saying that the reproductive rate of coronavirus could be as high as 1 in some parts of England.

Sir Patrick told a virtual briefing with journalists on Friday the R-number – the average number of people that will contract coronavirus from an infected person – for England was between 0.7 and 1, while it remained between 0.7 and 0.9 for the UK as a whole.

He said the prevalence of COVID-19 was on a “downward trajectory” in the UK, adding: “The prevalence of coronavirus, according to the ONS, is at 0.1%, with 53,000 people with COVID-19 in the past two weeks.”

He said the incidence rate was at 0.7% per week, which meant there were “roughly” 39,000 new coronavirus cases each week.

Sir Patrick said: “The latest R-value calculation is between 0.7 and 0.9 for the UK as a whole, it may be a little bit higher in England it may be between 0.7 and 1, and there is a bit of regional variation.”

He said there could be “some places” where the R-value is very close to 1 – which has now been confirmed by Public Health England’s new data analysis.

The Help to Buy scheme usually allows buyers to borrow up to 20% of a new-build property’s value from the government, put in a 5% deposit and take out a mortgage on the rest. The government loan is repaid as a percentage of the property’s value, rather than a set cash sum.

Out of around 35,000 people who had repaid their Help to Buy equity loans in England by the end of June last year, one in seven (14%) paid back less than they’d borrowed in the first place.

But despite how it might sound, repaying less isn’t a good thing. The idea of Help to Buy is that homeowners build equity through paying down the mortgage and the property value rising, enabling them to pay back the loan within the first five years (after which interest kicks in) and refinance or move to their next home using just their equity and a mortgage.

If the home loses value, the owner will pay back less to the government but also hold less equity themselves, while still owing the same amount on the mortgage. In an area where the surrounding house prices have risen – which is the case in every area where Help to Buy homes have fallen in value – this makes it extremely difficult to afford a new home.

There have long been suspicions of a ‘Help to Buy premium’ charged by developers to unwitting buyers. Here, Which? uses never-seen-before Help to Buy loan redemption data to explore whether there’s any truth to the rumours.

Help to Buy equity loan repayment figures kept under wraps – until now

Help to Buy homeowners usually settle their loans when the property is resold, but they can also do so when remortgaging by using equity they’ve built up in the home or borrowing more from the mortgage lender.

We now know that over 35,000 people have repaid their loans since Help to Buy launched in 2013. But when Which? started investigating this, it proved almost impossible to get hold of any data on how many loans had been redeemed, let alone whether they’d been repaid at a profit or loss.

In June 2019, we made a Freedom of Information request to Homes England. This and our subsequent appeal were both rejected. It was only after making a complaint to the Information Commissioner, which was upheld, that Homes England finally provided us with the data we’d asked for in April 2020.

The figures show that, up to June 2019, the government made an overall profit of 11.4% on repaid equity loans, but that 5,002 of the 34,747 loans were repaid at a loss.*

Given that public money is used to fund the scheme, and loan redemptions are a key indicator of its success, we were surprised that it was so challenging to get hold of this information.

• Find out more: what are Help to Buy equity loans?

_{*We have removed the top and bottom 0.5% of redemptions to exclude anomalies.}

‘Our Help to Buy home lost £12,000 in value’

Rebecca Tromans and her husband bought their first home at Crest Nicholson’s Bolnore Village development in Haywards Heath in January 2016. The new-build property cost £299,950, and they took out a 20% equity loan of £59,950.

Rebecca told Which?: ‘We were paying a lot in rent and really wanted to get on the housing ladder, but my husband was self-employed so mortgage lenders wouldn’t take his income into account.

‘We’d never really considered new-build homes as we knew they could be overpriced, but Help to Buy allowed us to get a mortgage using only my income.’

The couple could have only afforded a small home on the open market, but Help to Buy allowed them to buy a bigger property. Their plan was to live in the home for a couple of years and then sell up long before interest kicked in on the equity loan.

By 2018, Rebecca’s husband was in full-time employment, meaning the amount they could borrow on a mortgage had increased significantly.

‘We decided to sell in mid-2018, but it took us until early 2019 to find a buyer as the first sale fell through and then the market slowed down. We ended up selling the home for £287,500 – a loss of £12,450’, she says.

Rebecca feels that despite the loss, Help to Buy was a good short-term option given her circumstances. However, she believes buyers should think carefully about their long-term plans before using the scheme.

She says: ‘We did a lot of research at the start and planned how we could get out of Help to Buy and buy a home on the normal market, as we didn’t want the equity loan and interest payments hanging over our heads in the future.’

Revealed: the biggest Help to Buy losses

We looked at all 324 local authorities in England where loans have been repaid, and discovered that while most turned profits, 26 recorded losses.

Worryingly, Land Registry data shows that average house prices increased in every single one of these areas during the same period – and in 21 of the 26, they rose by more than 10%.

This begs the question of why Help to Buy properties fell in value in these areas, and implies that there may be some truth in critics’ suspicions that some developers have applied premiums to homes bought via the scheme.

House hunters using Help to Buy don’t have a great deal of negotiating power as loans are only available on selected properties, demand often outstrips supply, and it can be hard for buyers to know whether the asking price is fair or not – particularly on new developments where comparable properties’ sold prices are hard to come by.

Where have Help to Buy loans been repaid at a loss?

What’s happened in my town?

Hover over or click on an area to see the profit or loss made on Help to Buy loans, plus how many have been repaid.

• Find out more: how much are properties worth in my area?

How much profit has been made on loans?

Profit matters when reselling a Help to Buy property, as you’ll only have 80% of the proceeds remaining after you’ve paid off your equity loan.

This means that any house price stagnation or fall in value could leave you unable to progress up the ladder.

Percentage of Help to Buy properties making profits and losses

The chart above shows that most people who’ve repaid Help to Buy loans have made a profit on their homes.

However, the amount of profit made has fallen over the years.

By April 2019, more than half of equity loans taken out in the scheme’s first year (2013-14) had been repaid, with an average profit of 17%. By way of comparison, average house prices in England increased by 35% in the same period.

Fast forward two years to homes bought in 2015-16 and 19% of loans have been repaid. The average profit on repaid loans was 9%, compared with an 18% increase in overall house prices.

Average profit by year of property purchase

It stands to reason that homes bought earlier would turn the greatest profits because they’ve had longer to increase in price.

When we look a little deeper, however, it becomes clear that Help to Buy prices began to soar a couple of years after the scheme’s launch.

First-time buyers and the Help to Buy premium

Help to Buy was launched to boost housebuilding and ‘support a new generation in realising the dream of home ownership’. While it’s technically not limited to first-time buyers, more than 80% of properties sold under the scheme have been first homes.

In its first full calendar year (2014), 22,621 first-time buyers bought a home using Help to Buy. By 2019 that figure had nearly doubled to 42,960.

And as the scheme’s popularity has increased, so too have its price tag.

Between April 2013 and the end of 2019, the average price paid by first-time buyers in England for any type of home increased by 39%. The average amount paid by all buyers of new-build properties also increased by 39%.

But the amount paid by first-time buyers using Help to Buy jumped by a much heftier 51%.

Year-on-year price increases for all first-time buyers vs those using Help to Buy

It’s widely accepted that new-build homes cost more than existing properties. After all, they’re brand new, have warranties, and offer the novelty of no one else having lived there.

But even taking this into account, the double-digit price increases seen on Help to Buy homes sold in 2016 and 2017 seems excessive when compared with the overall market.

Problems reselling homes on Help to Buy developments

The minute you drive a brand-new car off the forecourt it depreciates in value, and the same is true of new-build properties. Unlike with cars, though, the hit taken on a new-build home should lessen over time, as property values across the entire market grow. Most new-build buyers will still ultimately sell at a profit.

But as we’ve shown, this isn’t always the case – particularly with Help to Buy, where buyers sometimes appear to pay above and beyond the usual new-build premium.

It’s hard to find resale data for Help to Buy properties, as the Land Registry doesn’t list whether a home was originally bought using the scheme. So we looked at developments that heavily promoted Help to Buy (but sold properties in the normal way too) to give an indication of what could have happened to Help to Buy homeowners who’ve tried to sell.

As the charts above show, many Help to Buy properties have made decent profits – particularly those from the earliest days of the scheme. But we’ve found multiple examples of developments where homeowners have struggled to sell, or been forced to lower their asking prices in order to attract a buyer.

Bridle Wood, Telford

The Bridle Wood development in Telford and Wrekin was launched in 2016, with just over half of its 79 properties bought using Help to Buy equity loans.

In its promotional material, developer Keepmoat Homes wrote that ‘with offers like Help to Buy, moving into a great new home could be more affordable than you think’.

Two homeowners at Bridle Wood have since sold their properties, turning losses of 14% and 1%. A third property sat on the market unsold for eight months.

Yet average house prices in the local area increased by 20% between January 2016 and March 2020.

Viridium, Camberley

In 2016, Hodson Developments held a dedicated Help to Buy event at its Viridium development in Camberley, Surrey, to showcase its new phase of homes.

Its ‘Belgravia Collection’ of properties was sold on the same development the previous summer.

Since then, four flats in the Belgravia Collection have been resold. Three suffered losses of more than £20,000, or 8% of the original purchase price, while one turned a small profit of 1.6%.

A fourth flat was listed in August last year for £9,000 less than the owner had paid for it, before being reduced by a further £10,000 in September, as shown on Zoopla:

It’s now sold, although we don’t yet know how much for. Even if the seller had achieved their final asking price of £265,000, though, that would have meant a loss of 6%.

Another four flats are currently for sale, all at the same price their owners originally paid. Three of them were originally on for more, but have since been reduced.

Meanwhile, average property prices in the local authority increased by 8% between August 2015 and March 2020.

The London conundrum

If your Help to Buy property has fallen in value and you’re worried about losing money when you sell, you could simply stay put.

But this can be expensive too, as interest payments kick in on Help to Buy equity loans after five years. Rates start at 1.75%, and rise by the level of the Retail Prices Index (RPI) plus 1% each year after that.

It might not sound too bad, but consider Help to Buy homeowners in London, where instead of the standard 20% you can borrow up to 40% of the property value from the government. Three quarters (77%) have opted to do this.

In a slow property market with little if any growth in house prices, homeowners face significant struggles to pay back these loans before interest kicks in.

Our calculations show that in year six, buyers who’ve taken out the maximum loan of £240,000 face paying £4,200 in interest on top of their mortgage and, if they’re in a flat, service charges and ground rent.

Help for house builders

Help to Buy has long faced allegations of lining the pockets of builders at the expense of buyers.

In September, Oliver Shah of The Times wrote that ‘rarely has an industry grown more addicted to the heroin of public cash than builders with Help to Buy’.

The National Audit Office says the total combined housing sales of five of the six largest developers in England – Barratt, Bellway, Persimmon, Redrow and Taylor Wimpey – have increased by more than half since Help to Buy was launched.

Overall, between 36% and 48% of these developers’ new homes were sold via Help to Buy in 2018.

Their share price increases have significantly outstripped those of the FTSE 250 since the scheme’s launch.

The future of Help to Buy

Criticisms of Help to Buy haven’t fallen on deaf ears. From next April (though possibly later due to coronavirus) the scheme will only be available to first-time buyers, and regional price caps will be brought in.

These caps were set at 1.5 times the average first-time buyer price per region in Autumn 2018.

Critics have pointed out that these prices will be at least two-and-a-half years out of date by then. With average values having risen in the meantime, developers may be put off building Help to Buy properties as it simply won’t be worth their while.

And therein lies the problem: as Help to Buy is limited to new-build properties, it needs developers’ buy-in to work.

Major house builders will only be interested if they can make a decent profit, but this comes at the expense of the buyers the scheme is intended to help, and the government itself.

Has Help to Buy been a success?

By the end of 2019, 214,000 first-time buyers had bought a home in England using Help to Buy. On that basis, the scheme has undoubtedly achieved its aims of boosting house-building and homeownership.

It has helped thousands of people who would otherwise have struggled to get a mortgage to buy their own home, and can often be a great option – provided that buyers have a plan for paying back the loan and that properties are priced right in the first place.

However, the extra borrowing power granted by Help to Buy equity loans has enabled ever-increasing price points rather than forcing developers to build homes that are affordable in the first place.

Couple this with the Public Accounts Committee’s finding that the government (and taxpayer) may make a small loss on repaid loans once inflation has been factored in, and it is reasonable to argue that house builders have benefited the most.

By the time the Help to Buy equity loans scheme is closed in 2023, the government forecasts it’ll have loaned £29bn to fund 462,000 purchases.

Many buyers will have reaped the rewards. But others may find that while the scheme helped them onto the property ladder, it left them stuck on the bottom rung.