More than a million people have used the government’s flagship Help to Buy scheme since its launch in 2012. Over 259,000 people have bought a home using one or more of the Help to Buy schemes, while 868,000 have opened a Help to Buy ISA. Chancellor Philip Hammond said: “This government is committed to helping […]
More than a million people have used the government’s flagship Help to Buy scheme since its launch in 2012.
Over 259,000 people have bought a home using one or more of the Help to Buy schemes, while 868,000 have opened a Help to Buy ISA.
Chancellor Philip Hammond said: “This government is committed to helping working people get on the housing ladder. Our Help to Buy schemes are proving hugely popular across the country. More than a million people are now using them to help achieve home ownership, particularly first-time buyers.”
More than 215,000 first-time buyers – 84% of total completions – are now on the housing ladder thanks to Help to Buy.
The average house price across the schemes is £192,854, which is below the national average of £220,000.
Gavin Barwell, housing and planning minister, said: “As our housing white paper sets out, we’re committed to helping more people find a home of their own with the support of a range of low-cost home ownership products.
“Our Help to Buy equity loan scheme continues to make home ownership a reality for thousands of people, especially first-time buyers right across the country.”
The North West, Yorkshire and The Humber, and the South West have seen the highest number of property completions using the Help to Buy ISA. In total, 45,098 completions have taken place across the UK using the ISA bonus since its launch in December 2015.
The London Help to Buy scheme has benefitted 2,381 buyers in the capital since 1 February 2016.
Criticism
Housebuilders have received £5.3 billion in Help to Buy cash since 2013, including £700 million in the last three months of 2016.
The number of Help to Buy loans was equivalent to a third (34%) of new private sector homes built in 2016, showing the extent of housebuilder reliance on this subsidy.
Labour has criticised the scheme’s lack of focus, with thousands of second-time buyers on higher incomes getting taxpayer support. The number of home-owning households rose by a million under Labour but has fallen by 200,000 since 2010.
John Healey MP, shadow secretary of state for housing, said: “The public spends billions of pounds on housing, most of it helping the private housebuilding industry. At the moment, Help to Buy is a blank cheque from ministers which housebuilders are cashing in.”
Andy Sommerville, director at Search Acumen, said that while on the surface the government has helped first-time buyers get on the property ladder, affordability still remained an issue.
“However, the underlying question of affordability still remains. The average price of £233,403 paid under the scheme jumps 6% above that paid on average for all properties in the UK in December 2016,” said Sommerville.
“This reveals that although the scheme has gone some way to facilitating house buyers onto the ladder, the overarching purpose of bringing the value down still needs addressing. The industry must pull together to overturn our housing shortage and answer the cries of those struggling to make that first purchase.”
With the Help to Buy equity loan scheme you can borrow up to 20% of the purchase price of a new-build home. The loan comes from the government and is repaid when the property is sold. The rest of the payment is made up with a deposit of at least 5% and a mortgage of up to 75%.
The London Help to Buy scheme provides an equity loan of up to 40% for buyers in the capital with a 5% deposit. It is open to both first-time buyers and those looking to step up the housing ladder.
The Help to Buy ISA is due to end in 2019. Savers with a Help to Buy ISA will be able to transfer into the Lifetime ISA from April or continue saving into both – but you will only be able to use the bonus from one to buy a house.
The Lifetime ISA and will allow anyone younger than 40 to put away up to £4,000 a year until they are 50. For every £4 people save, the government will give them back £1, a bonus of up to £1,000 a year. The savings and bonus in a Lifetime ISA can be used towards a deposit on a first home worth up to £450,000 or taken tax free at 60.
