28th November 2014
The government’s flagship homeownership scheme, Help to Buy, has helped 66,000 people to buy a property since it was introduced in April last year.
Help to Buy was introduced in two parts last year, the first offers a 20% equity loan to first-time buyers with a 5% deposit purchasing a new build up to a total value of £600,000. The second part is a mortgage guarantee, where the government will guarantee up to 15% of a home loan for first-time buyers and home movers with 5% deposit purchasing a property, whether new or old, up to a total cost of £600,000.
The Help to Buy scheme was aimed at helping first-time buyers and 81, or 54,000, of people using the initiative have purchased their first home. The North West has benefited the most from the mortgage guarantee while the equity loan has been successful in the East and South East, according to government figures.
While the scheme has been criticised for pushing up house prices, 94% of the total transactions completed under the scheme have been outside of London, where house prices have been rising the fastest
The average price paid for a property under the scheme is £186,000, or £156,000 for mortgage guarantee and £211,000 under the equity loan scheme – all prices are below the UK average house price of £273,000. The average income to house price multiple is 3.5 times.
Chancellor George Osborne said: ‘This government’s long-term economic plan is all about supporting hard-working taxpayers achieve their goals – and for many, their biggest goal is owning their own home.
‘That’s why this government created Help to Buy…It’s also helping to get Britain building again: housing starts soared by 23% last year, reaching their highest level since the economic crisis. Help to Buy is good for homebuyers, it’s good for the construction industry, and it’s great for the economy.’
Chief secretary to the Treasury Danny Alexander said: ‘Helping people onto the housing ladder or into a new home is a key part of our drive for a fairer society. Help to Buy contributes to our stronger economy, supporting house-building as Britain continues to benefit from a wide economic recovery.’