Homebuyers using the Help to Buy equity loan scheme are using just 33 per cent of the scheme’s maximum purchase allowance.
Analysis from Mortgage Advice Bureau shows customers using part one of the Help to Buy scheme (HTB1) bought properties worth £199,967 on average during the three months to October – even though the upper purchase limit through the government scheme is £600,000.
The average price of property bought through HTB1 is also 21 per cent less than the average purchase price of £251,000 across the new build market according to the latest House Price Index from the Office for National Statistics.
The data indicates that Help to Buy 1 activity remains focused at the lower end of the property ladder.
Equity loan leaves October’s buyers needing just £15,479 of their own funds
A borrower who took a loan of £144,494 (the HTB1 average for October) for the typical new build purchase (£251,000) would have been left needing to raise £106,506 as a deposit.
But HTB1 customers in October opted for lower-priced homes, at an average of £199,967. That means they would need just £55,472 of non-mortgage finance to make their purchase. If buyers take full advantage of the government’s 20 per cent contribution (worth £39,993) then they need to raise just £15,479 of their own for a deposit.
