More than 2,000 households that have used the government’s Help to Buy scheme since 2013 had average earnings above £100,000, new data has revealed.
According to the latest Help to Buy mortgage guarantee statistics from the Treasury, 2,035 households taking out a loan between October 2013 and December 2015 earned more than £100,000.
The figures will fuel concerns that first-time buyers who need a helping hand to get on the property ladder are being squeezed out by those who can already afford to buy.
Since the mortgage guarantee scheme was introduced a total of 73,726 loans have been taken out. Of these, nearly a third of households had combined incomes of more than £50,000, with eight out of 10 purchases by first-time buyers.
Labour housing spokesman, John Healey MP, said: “George Osborne is throwing money at those who can already afford to buy, at the expense of those who genuinely need a hand up. Apparently even Conservative MPs are benefitting from taxpayer-backed housing loans.
“People will be astonished that households earning more than £100,000 received Help to Buy loans. Support for people wanting to buy a home must be available first and foremost for those who need it.
“Under Tory ministers home ownership has fallen sharply, with over 300,000 fewer young people owning a home than in 2010.
“Increasing home ownership is Labour’s top housing priority. That’s why I’ve commissioned the independent Redfern Review to help us get to grips with the decline in home ownership.”
The Help to Buy mortgage guarantee scheme provides a government guarantee to lenders on mortgages where a borrower has a deposit of between 5% and 20% for existing properties as well as a new-build.
The average price of a property purchased or remortgaged through the scheme is £155,897, compared to a national average house price of £288,000.
The news comes after a recent government report on the Help to Buy equity loan scheme revealed that the average applicant earns an average wage of £47,000.
Incomes were highest in London, where the average was £64,900, and lowest in the North East, Yorkshire and the Humber region (£39,000). To compare, the average UK salary is £26,500.
The average price of a property purchased under the Help to Buy equity loan programme to date has been £216,000, going up to £314,210 in London.
Over 150,000 people have bought a house using the Help to Buy scheme since it was launched
Patrick Bamford, director of mortgage insurance Europe for Genworth, said: “It is concerning to see the number of loans fall by 12% year-on-year at a time when it should be in its prime. Add to this the fact overall lending at 95% loan-to-value has also fallen and it appears very unlikely that high LTV lending will continue unabated when the scheme finishes at the end of 2016.
“High LTV lending is critical for supporting first-time buyers, who in turn are crucial to the health of the UK housing market. A significant drop in the number of first time buyers would have huge social and economic ramifications. Any further decline in 95% LTV lending adds to the many challenges hopeful first time buyers already face: a lack of housing supply, rising prices, larger deposit requirements and stagnating wages.”
The government has introduced a number of new schemes in recent years to help those looking to buy a home, including Help to Buy and Right to Buy. In the Autumn Statement last year, Chancellor George Osborne unveiled plans to build 400,000 homes and announced a 3% rise in stamp duty as part of the government’s aim to curb the buy-to-let sector and free up property for first-time buyers.
Help to Buy London was launched on 1 February and gives aspiring homeowners who have been frozen out of the market in London the opportunity to get on the housing ladder. First-time buyers with a 5% deposit can borrow up to 40% of the value on a new home priced up to £600,000. They will need a mortgage of 55% to cover the rest.
Help to Buy ISAs, introduced in December, give first-time buyers saving for a deposit the opportunity to put away £200 a month in a dedicated ISA that the government will top up by 25%, up to a maximum of £3,000.
