Help to buy gives 81% of FTBs a leg up
The Ministry of housing, communities & local government released statistics for help to buy today, revealing that since the scheme’s launch on 1 April 2013 to 31 March 2018, it has fuelled the purchase of 169,102 properties – 81 per cent of which were by first-time buyers.
The total value of properties sold under the scheme stood at £42.23bn, and the total value of help to buy loans made up £8.93bn of this. For first-buyers, as of Q1 2018 these numbers were £32.8bn and £7bn, respectively.
In terms of property prices, the mean average of houses sold under help to buy was £249,708. The mean equity loan average was £52,834.
The biggest proportion of deposit amounts, at 58 per cent of all completions made under help to buy, was in the ‘up to 5 per cent’ range, whereas only 13 per cent put down 15.1 per cent or more.
The issue of leaseholds versus freeholds has been in the news recently, with the government eager to regulate new builds sold under a leasehold, and the law commission recommending that existing homeowners are given the ability to buy their leasehold more easily and cheaply.
While 92.8 per cent of the 27,129 flats sold under help to buy where sold under leasehold, of the 141,945 houses sold, 88 per cent were as a freehold tenure, a trend that has grown since early 2017, according to the report.
Of the statistics, Legal & General Mortgage Club new build manager Craig Hall comments: “Whilst the [help to buy] scheme certainly eases the issues with affordability and a raising a large deposit, over recent years we have seen mortgage lenders improving their core new build offering, providing further choice and reducing the dependency on the scheme for many borrowers.
“It’s no secret that we need to build over 300,000 new homes a year to keep up with demand; and the government will need to find a range of solutions in order to help meet this target. Whether it’s guaranteeing the scheme post-2021, increasing support for other affordable schemes such as shared ownership, or relaxing planning restrictions, we need new supply entering the market – stimulating growth and allowing it to better serve those who need it most.”
Bluestone Mortgages director of sales and marketing Steve Seal says: “It is great to see the development of schemes designed to assist consumers who would otherwise struggle to access the property ladder.
“The market contains pockets of borrowers like first-time buyers, who require extra support to reach their homeownership aspirations, particularly as the cost of living becomes ever more expensive. As an industry it is essential that we ensure that provisions are in place to cater to a wide range of needs.”
Source: Mortgage Strategy