Help to Buy scheme in England continuing to aid first time buyers

Some 134,558 properties have been bought in England with the Government’s Help to Buy equity loan scheme since it was introduced in April 2013, most sold to first time buyers, the latest official figures show.

The total value of these equity loans was £6.72 billion, with the value of the properties sold under the scheme totalling £32.37 billion, according to the data published by the Department of Communities and Local Government (DCLG).

Most of the homes, some 81%, were bought by first time buyers and the mean purchase price of a property bought under the scheme was £240,530, compared with a mean equity loan of £49,963.

In London, the maximum equity loan was increased from 20% to 40% from February 2016, and since then to June 2017, there were 4,586 completions in London, of which 3,487 were made with an equity loan higher than 20%.

For the Help to Buy: NewBuy scheme 5,694 house purchases were made since the launch of the scheme in March 2012. There were no new transactions in the second quarter of 2017 due to the scheme closing to new mortgage offers on 08 March 2015.

Since launch 8,813 properties in London were bought with an equity loan and since 01 February 2016 Help to Buy applicants were able to claim an equity loan up to 40% of purchase price for properties in Greater London and since then there were 4,586 completions in London in 33 boroughs of which the vast majority, some 4,412, were made by first time buyers.

The data also shows that 104 completions were made with an equity loan of less than 20% of the purchase price, 995 with an equity loan of 20%, 500 with an equity loan of between 20% and 40%, and 2,987 with an equity loan of 40%.

The Help to Buy: Equity Loan scheme can be used to purchase a new build property up to the value of £600,000, with a maximum equity loan of £120,000 or 20%. In Greater London, the maximum equity loan is £240,000 or 40%.

Most completions, 27%, were in the £150,001 to £200,000 range, followed by 22% in the £250,001 to £350,000 range and 20% in the £200,001 to £250,000 range. The £150,001 to £200,000 range also accounted for the greatest proportion of homes purchased by first time buyers at 29%.

The median purchase price was £204,950 for first time buyers and £264,995 for others. The mean purchase price was £230,633 and £281,977 respectively. The mean purchase prices are higher than the corresponding median purchase price, reflecting fewer sales in the higher price ranges.

In London, the median purchase price was £379,950 for first time buyers and £440,000 for others while the mean purchase price was £386,179 and £432,387 respectively.

The property type most frequently sold under the scheme was semi-detached houses, representing 31% of total completions, followed closely by detached properties at 30% while terraced properties and flats made up 24% and 15% of completions respectively.

Most completions under the Help to Buy Equity Loan scheme were made by purchasers with a deposit of up to 5%, accounting for 63% of completions for first time buyers and 44% for others.

Overall 76% of purchasers had household incomes of £60,000 or less, whilst 4% had household income over £100,000 a year. For first time buyers some 25% of purchases was by households with a total income between £30,001 and £40,000 a year, followed by households with income between £40,001 and £50,000 at 22%.


Written by: Houseladder