The typical HTB2 deposit was £8,974 in September, a 3% decrease since August – when the average HTB2 deposit was £9,229 – and significantly lower than September’s purchase market average of £67,929 (-87%).
Compared to a typical purchase price of £226,641 in the wider market, HTB2 applicants paid an average of £150,488 in September: the lowest price recorded in four months and a 6% decrease since August (£159,527).
This suggests the scheme is hitting the mark in terms of attracting less affluent buyers who are looking to purchase lower-priced first homes.
The average LTV for a mortgage guarantee applicant was 94% – just 1% below the scheme’s limit – in comparison to 70% in the rest of the purchase market.
The data also shows that HTB2 applicants earning an average salary of £31,270 could potentially become homeowners within 9 months if they are buying with a partner or friend, or 1.4 years when buying alone.
Brian Murphy, head of lending at Mortgage Advice Bureau, comments:
“The Help to Buy mortgage guarantee scheme continues to fill a void in the market in terms of affordability, offering a realistic way into the property market for buyers who are unable to save a large deposit.
“The generosity of the 95% loan-to-value associated with the scheme is clearly not being abused: lower earners are using the scheme to purchase lower-priced properties and are taking on much smaller levels of debt as a result.
“Our data shows that even those aspiring owners who haven’t begun the task of saving until now can still feasibly become homeowners through the scheme in a relatively short space of time, while sharing the deposit with a partner or friend could reduce this period of saving to under a year.”
