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48,000 new homeowners thanks to Help to Buy

48,000 new homeowners thanks to Help to Buy

Category: Mortgages

Updated: 03/09/2014
First Published: 03/09/2014

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 It is now over 6 months old so the content may be out of date.

The Help to Buy scheme may not have been around for that long, but it has certainly had a positive impact on the prospects of first-time buyers (FTBs).

Official figures show that the Government's Help to Buy scheme has so far supported over 48,000 completions since its inception, with the assistance largely going where it's needed – to those taking their first step onto the property ladder.

In the first 16 months (to 31 July 2014) of the equity loan element of the scheme, 29,829 properties were bought using Government funding, with 85% of those sales going to FTBs.

Meanwhile, the mortgage guarantee element has supported 18,564 completions in its first nine months (to June 2014), with 79% of those being FTB purchases.

The average purchase price of a home bought using the scheme was £187,800 (£209,390 for the equity loan and £153,148 for the mortgage guarantee), significantly lower than the national average house price of £265,000.

Overall, 82% of scheme completions have been made by first-time buyers while 94% of the total 48,393 completions have been made by households outside of London, providing further indication that the scheme has supported the buyers it was designed for.

The support would have been particularly welcome to those struggling because of rising house prices. Getting on – or moving up – the ladder can be difficult enough as it is, but when prices are rising by 11% each year, as the latest figures from Nationwide suggest, it becomes even harder.

In August, the typical UK home cost £189,306, and prices had increased by 0.8% in a single month. Although there are signs of this price growth slowing down, for those struggling to get on the ladder, this pace of growth will often be a significant barrier.

That's why the Help to Buy scheme has been so, for want of a better word, helpful.

The equity loan element of the scheme means borrowers will get an interest-free loan for the first five years and will only need to seek a mortgage of around 75% loan-to-value (LTV), while the mortgage guarantee element has increased the availability of 95% LTV mortgages, making it easier for those with a small deposit to seek suitable finance.

All in all, it can only be a good thing, and considering the figures show that the typical cost of a home bought through Help to Buy is just £187,800 – far less than the national average – it can't really be blamed for inflating house prices, either.

What next?

Find a help to buy mortgage.

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.