Help to Buy completions hit 130,000

Over 130,000 people have now bought a home through the Help to Buy scheme, according to the latest government figures.

Related topics:  Finance News
Rozi Jones
9th December 2015
New house FTB

80% of scheme completions have been made by first-time buyers, with more expected following the launch of the government’s Help to Buy: ISA scheme on 1 December.

The average house price purchased through the scheme is £186,000, significantly below the national average, with 94% of Help to Buy completions took place outside of London.

With almost all completions outside London, the highest number of homes through the mortgage guarantee scheme have been in the North West region. The equity loan – a scheme for new build properties – is particularly prevalent in the South East region.

Figures for the mortgage guarantee scheme also show completions have been least concentrated in regions where house price growth is highest. In London the scheme makes up just 1% of all mortgage lending compared to an average of 3% across the country.

George Osborne said:

"The stronger economy and financial system means we expect banks to start to exit our Help to Buy Mortgage Guarantee scheme, which was introduced in times of financial distress and is due to come to an end.

"Now our Help to Buy: ISA, which launched this month, is set to help hundreds of thousands of more people saving for their first home, by providing a bonus of up to £3,000 for their deposit."

Andy Frankish, New Homes Director at Mortgage Advice Bureau, commented:

“The Help to Buy equity loan scheme helped more than 6,000 people onto the property ladder in Q3 2015: an annual increase of 4%. The vast majority of those benefitting from the scheme are first-time buyers who understandably are purchasing properties in the lower price brackets. The scheme continues to reach its target audience of buyers joining the property market for the first time as homeowners.

“Compared to other regions, uptake of the scheme in London has been relatively low, with 85% of London boroughs having less than 200 Help to Buy equity loan completions. House prices in the capital are so high, a 20% equity loan is still not enough for many to be able to afford a property. The introduction next year of a dedicated Help to Buy scheme for London, with an increased 40% equity loan, will therefore be welcome news for first-time buyers struggling to afford to buy in the capital. The scheme will require a maximum 55% mortgage, rather than one at 75% loan to value.

“While the equity loan scheme is well ingrained in the sales of new homes, and continues to evolve in response to buyer’s needs, more creative solutions that address underlying problems to housing affordability must be developed in addition to targeted schemes. The greater focus being placed on shared ownership will help, as will the creation of Starter Homes, but these will need the full support of lenders to have the desired effect. Increased housebuilding will eventually deliver more homeownership opportunities.”

Andrew Bridges, managing director of Stirling Ackroyd, added:

“Help to Buy is a radical scheme for drastic times – but it will never be enough to shift the dial fundamentally. Because it is not Help to Build.
 
“First time buyers are facing a sheer cliff of house prices. Particularly in our capital city. Just a one bedroom flat already costs more than the £450,000 upper limit for the Help to Buy ISA in two thirds of London postcodes – and will in time push past the £600,000 limit for the Help to Buy scheme itself.
 
“So special schemes like this are a leg-up onto the housing ladder – for today’s potential buyers, not necessarily tomorrow’s. Helping current buyers speed up their ambitions is honourable – but is likely to only boost prices further. We’re seeing prices accelerate in the capital again now, even into the winter months. In light of this, there is a creeping danger that the government focuses only on shorter-term solutions, and not the long-term challenges too.
 
“In the long run, there’s only one thing London’s first-time buyers need from the government – more homes to live in, whether as owner or tenant. Planning officials need steadily increasing targets for new homes, not a vaguer preference for rejections.”

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