The latest on Help to Buy

The latest on Help to Buy
Posted by James Hood

The government’s ‘leg up’ onto the property ladder has proven a hit with buyers – especially those doing it for the first time. Here are the latest facts and figures, released today.

New stats out today (Thurs 29 May) show how Help to Buy is opening up home ownership to thousands and supporting the Government’s long term plan to help people secure a better future for themselves and their families. In total 27,861 households have been helped by the scheme, which continues to benefit first-time buyers (around 85 per cent of applicants).

The South East has seen the highest number of Help to Buy loans completed, with 4,439 loans and mortgage guarantees provided, accounting for almost a quarter of all the lending nationally from the scheme. The average price of the homes included in the deals in the South East was £206,731.

Help to Buy is also helping to increase housing supply, with the scheme driving demand for new-build homes. 74 per cent of the homes bought through Help to Buy are new-build properties. Private house building is up 34 per cent since the launch of Help to Buy and leading builders credit the scheme for reinvigorating the house building industry and boosting housing supply.

Responsible lending
It’s also thought that Help to Buy is supporting responsible lending, with the average house price for the combined schemes at £191,295, or £151,597 for mortgage guarantee and £204,805 under the equity loan scheme – all of which are well below the UK average house price of £252,000.The average house price to income multiple under the mortgage guarantee scheme is just over 3 times the salary.

Across the country
The figures also show how Help to Buy is benefiting every region of the country, with the North West as the highest region for the Mortgage Guarantee, while the Equity Loan - the scheme for new-build properties – is at its highest in the South East. A high percentage of completions under the scheme do still remain outside London however.
 

Speaking about the scheme and in response to the latest figures, the Prime Minister said: “As Britons, home ownership is in our blood - it’s about aspiration, planning for the future and laying down roots. Today, Help to Buy has helped thousands of hardworking people to buy a new home and crucially it is helping to increase the number of new homes being built around the country. It is an important part of our long term plan to back those who want to get on and to secure a better future for Britain."

 

The facts
The Help to Buy Equity Loan enables people to buy a newly-built home with a deposit of at least 5 per cent of the property price, while the government offers a loan of up to 20 per cent. The rest is covered by a mortgage.

Meanwhile, the Mortgage Guarantee offers mortgage lenders the option to purchase a guarantee on mortgages where a borrower has a deposit of between five per cent and 20 per cent. Because of this support, participating lenders are able to offer more mortgage products to borrowers with small deposits.

The Help to Buy Equity Loan scheme, the part of the scheme for new-build homes, has been extended up to March 2020 with a further £6 billion – meaning the scheme will support the construction of up to 200,000 new homes.


Mortgage Guarantee data is for October 2013 to end March 2014.

Equity Loan data is for April 2013 to end April 2014.



We would love to hear from you if you're looking to buy property in London. And for information on how Outlet can help you with the financial matters of buying a home, get in touch with our Money team on 020 3468 3138.

 

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