The Help to Buy scheme, which helps people buy a new home with just a 5 per cent deposit, is benefiting first-time buyers, says the government.
New figures show that 17,395 people have already bought a home through Help to Buy as the number of aspiring homeowners using the scheme continues to grow.
Both sides of the Help to Buy scheme are supporting first-time buyers, with over 89 per cent of sales going to people using part 1, the equity loan element and 82 per cent of sales for part 2, the mortgage guarantee scheme.
Across the country
The figures also reveal how Help to Buy is benefiting every region of the country. The highest number of people buying a home through the mortgage guarantee is in Scotland and North West, while the equity loan – the scheme for new-build properties, helping to stimulate house building – at its highest in the South East.
More than three quarters (77 per cent) of those supported by Help to Buy equity loan are from outside London and the South East, rising to 85 per cent for mortgage guarantee completions.
Find out how Louise, Aaron and Victoria benefited from Help to Buy.
Average house prices
The average cost of a house bought under the mortgage guarantee is £148,048 while under the equity loan scheme it is £203,137, both of which remains below the UK average house price. An average house price bought under Help to Buy as a whole is £194,992.
Mortgage guarantee completions triple in one month
The mortgage guarantee completions tripled from 750 to over 2,500 in just over one month and mortgage lenders from both ends of the scale continuing to see strong demand: two of the largest lenders, Lloyds and RBS have received 9,569 applications, and one of the smallest lenders in the scheme, Aldermore has received 2,313.
Equity loan extended to 2020
The government has already announced an extension to the Help to Buy equity loan scheme, the part of the scheme for new-build homes, up to March 2020. It has also pledged a further £6 billion to help 120,000 more households buy a new-build home, meaning around 200 000 people are expected to be helped by the equity loan side of the scheme alone. There are currently 10,424 reservations in the pipeline.
The Prime Minister David Cameron said: “Help to Buy is a key part of our long-term economic plan, giving thousands more people the security and independence that comes from owning their own home.”
What is the difference between the two schemes?
The Help to Buy Equity Loan enables people to buy a newly-built home with a deposit of at least 5 per cent of the property price, while the government offers a loan of up to 20 per cent. The rest is covered by a mortgage.
Meanwhile, the Mortgage Guarantee offers mortgage lenders the option to purchase a guarantee on mortgages where a borrower has a deposit of between 5 per cent and 20 per cent. Because of this insurance, participating lenders are able to offer more mortgage products to borrowers with small deposits.
Check out What Mortgage Help to Buy Guide for more inforamtion on the scheme
