Help to buy loans reach a new high.The Help to Buy equity loan scheme was used to purchase 52,268 homes in England in the year to the end of June, new figures from the Ministry of Housing, Communities and Local Government have revealed. this is up six per cent from the same period last year and represents a new record high since the scheme was launched in 2013.Of those purchases, 43,285 were by first-time buyers. This is up eight per cent on the 40,228 from last year, while in London, purchases through the scheme came to a total of 6,149, a rise of 26 per cent compared to the previous year.The data also revealed that since the scheme’s launch, around 56 per cent of the homes purchased had a value of less than £250,000, rising to 60 per cent when considering just first-time buyers.
Meanwhile, the median equity loan stands at £47,399 for all completions (falling to £45,000 for first-time buyers), while more than four out of every five purchases (83 per cent) is of a house rather than a flat or studio.
More than half (56 per cent) of Help to Buy purchasers did so with a deposit of up to five per cent, though around one in six (14 per cent) used a deposit of more than 15 per cent.
Research from mortgage lenders the Aldermore and Halifax found first-time buyers still felt there were barriers – https://www.bestpricefs.co.uk/blog/mortgage-research-study/ which stopped them from believing they could own a home.
Halifax found that mortgage affordability and saving for a deposit were the main obstacles, while Aldermore’s research showed a disparity between sexes with 68 per cent of women seeing home ownership as home unachievable, compared to 57 per cent of men.
The Help to Buy ISA scheme closes to new investors on 30th November and could see savers have their deposit boosted by a £3,000 bonus from the government.
HTB – Higher interest rates?
The top 10 best rates of Help to Buy ISAs and Lifetime ISAs (another scheme which offers a bonus on house deposits) and found that on average, the interest was higher on the former at 2.41 per cent compared to the Lifetime ISA’s average interest rate of just 1.20 per cent.
Someone without any financial support from their family or a partner to buy a home with may feel like home ownership is unlikely to ever happen and could feel as though they will be renting for life.
The Help to Buy offer shows no sign of slowing down, noting that the March 2021 cut-off is likely to “inject even more urgency into the market”.
Demand has been particularly strong in London with properties bought by first-time buyers using the scheme increasing by more than a quarter compared to last year. It is notable, however, that 75 per cent of purchases are made using the full 40 per cent equity loan, emphasising the challenge of buying a property in areas where property prices are high.
Get in touch if you would like to discuss your help to buy options or any other mortgage requirements or simply click the link below in order to make contact and gather a free initial mortgage consultation: https://www.bestpricefs.co.uk/mortgages/. We are focused on delivering the best mortgage product to you at the best price so you can gather the key to the door as efficiently as possible.
Best Price FS Team