750 homes bought with Help to Buy - Mortgages - News - Moneyfacts

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750 homes bought with Help to Buy

750 homes bought with Help to Buy

Category: Mortgages

Updated: 02/01/2014
First Published: 02/01/2014

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Latest Government figures have revealed that almost 750 homes have so far been bought under the second phase of Help to Buy, with a further 6,000 people having applied for a mortgage and made an offer on property. This means that, in total, almost £1bn in loans will have been advanced to new homeowners once pending applications have been approved.

The figures were compiled using data from RBS and Lloyds Banking Group and relate to the period from the start of the scheme in October to 18 December. Under the mortgage guarantee element, prospective home buyers or movers can get a mortgage with a 5% deposit as a further 15% will be backed by a Government guarantee should the borrower default, ideally encouraging more lenders to offer high loan-to-value products.

The aim is to get more people onto the property ladder that were previously frozen out, and although the number of completions isn't yet exceptional the number of applications shows that the scheme is moving in the right direction. And, with funds under the scheme allowed to be drawn down from the beginning of January and more lenders set to enter the Help to Buy market it's thought that these figures could soon increase, with Lloyds Bank itself having just announced the launch of its own Help to Buy mortgage guarantee range.

The scheme has attracted a lot of controversy, with critics fearing it could lead to inflated house prices and an uncontrollable housing market. Advocates, however, argue that the majority of Help to Buy applications come from areas outside London and the South East where there are no such fears, but have pointed out that building more houses should be a high priority to re-balance the current issue of supply and demand.

Sylvia Waycot, editor of Moneyfacts.co.uk, comments on the latest findings:

"Harbingers of doom are already casting shadows over the only good news for first-time buyers in a long time. Let's concentrate on the fact that people who were previously denied access to a mortgage because they couldn't raise the enormous deposit, even though they were employed and had good incomes, can now get on the housing ladder. I am sure that the construction industry will attempt to fill any shortfall in houses with the greatest of zeal."

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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