According to the latest figures, the typical age of those using the ISA, which provides a tax-free savings plan and a Government bonus to build up a deposit, is 27 which compares to the national average first-time buyer age of 30.
What’s more, the average price of a property purchased through the scheme is lower than the average first-time buyer house too.
Figures from HM Treasury revealed the typical value of a property purchased through the Help to Buy ISA scheme was around £172,000 compared to the £193,000 paid out on average by those purchasing their first home through other means. The national average house price is currently £228,384.
Criticism of the scheme
Help to Buy – including the Help to Buy: Equity scheme, which provides a Government loan to help people pull together their deposit – has come under fire from critics who are concerned about problems borrowers face when it’s time to remortgage and the loan needs to be repaid.
The ISA scheme was also attacked recently over a glitch in the way the bonus funds were released.
Gemma Harle, managing director of Intrinsic mortgage network, part of Quilter, said even with the negative factors, the fact that Help To Buy has supported 400,000 first time buyers onto the housing ladder was certainly no bad thing.
“The latest figures show it must be celebrated at least for driving down the average age of a first time buyer,” she said.
The earlier, the better
She added: “Getting on the housing ladder earlier ultimately means that you have longer to pay off your mortgage and gives you a fighting chance of being mortgage-free in retirement.”
Harle said its research showed nearly a third of people who retired recently did so with some form of debt. Of these people, 13% said the debt was mortgage related.
As an additional concern, these retirees had also enjoyed lower house prices and therefore smaller mortgages than borrowers applying today.
“Help to Buy has clearly heralded some positivity for a generation who face an uphill battle to get on the housing ladder,” Harle said.
Increasing numbers
The Help to Buy: Equity Loan scheme has increased by 15% year on year in England, according to the latest statistics. This figures rises to 34% in London.
The decision to extend the scheme to 2023 for first-time buyers was reinforced by the fact 81% of those who used it, the new figures revealed, were those buying their first home.
Lucy Pendleton, founder director of independent estate agents, James Pendleton, said: “Transaction levels nationally remain depressed but hunger for Help To Buy shows no sign of abating with the scheme helping first-time buyers buy £5.8bn worth of property in the first half of 2018.”
