Help to Buy living up to its name as it helps nearly 20,000 purchases in first 12 months

30th April 2014

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Help to buy has assisted in the purchase of 19,394 properties in the first 12 months of the scheme according to the Department for Communities and Local Government.

The total value of the loans was £791m involving properties with a value of £3.97 billion. The median property price was £184,995 and the median loan £36,999. First time buyers accounted for 16, 964 purchases or 87.5% of the loans in the scheme. The Help to Buy New Buy scheme helped 177 home purchases in the first quarter of 2014 bring the total number of purchases to 5,173 since March.

The majority of properties sold under the scheme were terraced houses, representing 30.7 per cent of total completions. Semi-detached properties made up just over a quarter (27.0 per cent) of  total completions, whilst flats and detached properties made up 19.1 and 23.1 per cent of completions respectively.

Commenting on the figures, Richard Sexton, director of e.surv chartered surveyors says: “A year on, Help to Buy has helped turn the mortgage market around, with the equity loan scheme assisting almost 20,000 aspiring home owners to get onto the property ladder. Just twelve months ago, many prospective home-owners found themselves stuck on the side-lines of the property market, unable to raise the deposit they needed to make the first move into the arena. Help to Buy has provided the solution, and nine out of ten of those who have benefitted have been first-time buyers. In fact, March this year saw the most first-time buyer sales since before the recession struck.

“Buying a house is becoming a much more attainable aspiration for many. One in six loans are now to high loan-to-value borrowers, as high LTV mortgages have become more accessible and rates have remained relatively low. But there are still challenges to be resolved.

“The equity loan scheme has increased appetite for new build property, but there is still a shortfall in housing stock. This has led to increased competition between buyers, which has been pushing prices upwards. To counter this, more construction is needed to satisfy the demands of prospective buyers. Planning regulations should be eased, and builders given more support and incentives to facilitate the necessary vision of a new-build future.”

Matt Sanders, Gocompare.com’s mortgage spokesperson, says: “The Help to Buy scheme really does seem to have lived up to its name judging by the figures released today, as the majority of people who have used the scheme are first time buyers (87.5%). The upsurge in the property market over the past twelve months has no doubt been helped by the scheme as nearly 20,000 people bought a home using the government’s equity loan system.

“These figures will have no doubt exceeded expectation and show that there really is the need for such a scheme in the UK, but the fear is that with so many people wanting to buy new homes that there isn’t enough supply in the pipeline and prices are being pushed up.”

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