Help to Buy has now helped more than 400,000 first time buyers, new data shows
More than 400,000 first time buyers have been able to get on the housing ladder using the Government’s Help to Buy schemes, according to the latest official figures to be published.
Over 458,000 completions have taken place overall using one or more of the Help to Buy schemes of which 402,000 were first time buyers, the quarterly statistics show.
The data also shows that first time buyers have now opened 1.2 million Help to Buy ISAs, offering Government bonuses of up to £3,000 on top of their savings, the average house price purchased through the schemes is £201,881 and over 93% of completions across the Help to Buy schemes have taken place outside of London.
‘We want to help as many people as possible experience the fantastic feeling of pride you get when you collect the keys to your first home. That’s why we offer the special Help to Buy: ISA for them to save, cut their Stamp Duty, and introduced a new Help to Buy Equity Loan to run until March 2023,’ said John Glen, Economic Secretary to the Treasury.
Secretary of State for Housing, James Brokenshire, said that he is committed to making the housing market work for everyone and restore the dream of home ownership for a new generation.
‘It’s great news that since 2010 we have helped over half a million people get on the housing ladder, through programmes such as Help to Buy. We are determined to do more, which is why we have dedicated over £44 billion of investment to help deliver the homes communities need,’ he added.
A breakdown of the figures show that the most completions using the Help to Buy ISA have taken place in the North West and Yorkshire and the Humber. In total, 169,980 completions have taken place across the UK since its launch in December 2015.
The London Help to Buy scheme, which provides an equity loan of up to 40% for buyers in the capital with a 5% deposit, has helped 13,697 buyers across 33 boroughs purchase their own property between February 2016 and June 2018.
More than 183,000 completions have now taken place through the Help to Buy Equity Loan scheme, which offers buyers up to 20% of a newly built home’s costs so they only need to provide a 5% deposit.
By March 2021, the Government expects to have invested around £22 billion in the scheme, supporting up to 360,000 households into home ownership.
Grainne Gilmore, head of UK residential research at Knight Frank, pointed out that the number of Help to Buy Equity Loans taken out in the second quarter of 2018 has risen to the highest level since the scheme began in 2013.
‘This uptick in activity may reflect the rise in new homes completions in the second quarter of the year, as well as discussions through this period around the future of Help to Buy. The Government has now confirmed that the scheme will be changed in 2021, and from then will only be available to first time buyers for a further two years, with regional caps on sale prices,’ she added.
But more needs to be done when it comes to tax, according to Rupert Dawes, joint head of residential development at Knight Frank. ‘The latest numbers on Help to Buy released today will be seen as encouraging within the UK’s residential development sector. Its two year extension, announced early in the year, has given developers certainty for the medium term, helping to drive home ownership across the UK,’ he explained.
‘However, if the Government is serious about boosting home ownership, and reaching its annual housing target, it needs to address the high level of taxation when buying a property as well as supporting land owners and developers via a review of the planning system,’ he added.
The statistics underline that there is considerable appetite for Help to Buy among home buyers, according to Kate Davies, executive director of Intermediary Mortgage Lenders Association (IMLA).
She pointed out that the programme continues to stimulate the bottom of the housing ladder and indirectly support the whole of the UK property sector and 2018 looks set to be the strongest year so far for Help to Buy sales.
‘This further highlights that Help to Buy will remain invaluable in supporting home buyers into the next decade and will play a crucial role in helping to keep the housing market on an even keel during a period of heightened uncertainty as a result of Brexit,’ she said.
‘Mortgage brokers have remained indispensable in facilitating the Help to Buy remortgaging process, especially to first time buyers who have never navigated the home buying process before. Indeed, intermediaries’ role in the process is becoming even more important as early Help to Buy adopters seek a broader range of refinancing options, with a number of Help to Buy remortgage products already on the market to address growing demand,’ she explained.
‘We welcome Homes England’s commitment to work even more closely with lenders and mortgage brokers to provide regular policy updates and arm intermediaries with the vital information necessary for home buyers to successfully manage the Help to Buy process over its entire life,’ she added.