Help to Buy, the UK government’s flagship scheme, has helped more than 71,000 people across the country buy a new home, the latest official figures show.
In total over 66,000 households have been helped by the Help to Buy mortgage guarantee and Equity Loan which was introduced to help those who cannot afford a mortgage to buy a home.
Some critics claimed it would not actually help those who needed it and be used by buyers in London to the detriment of others but the figures show this has not happened. The figures reveal that 81% of Help to Buy sales are to first time buyers, helping 54,000 into their first home and the vast majority of sales have been outside of London and at prices well below the national average.
Together with the government’s NewBuy scheme which offers 95% mortgages for those buying new build properties, the number of new home owners has reached more than 71,000.
The figures also show how Help to Buy is benefiting every region of the country. The North West is the highest region for the mortgage guarantee, while the Equity Loan scheme for new build properties is particularly successful in the East and South East and overall 94% of completions under the scheme remain outside London.
Leeds council is the highest performing local authority across the country for the two parts of Help to Buy with almost 1,000 new homes secured by its residents. While Birmingham council has seen a significant increase of over 300 new completions.
Help to Buy is also helping to increase housing supply and get Britain building by driving demand for new build homes. Over half of the homes bought through the scheme are new build properties, and private house building is up 20% since the launch of the Equity Loan scheme.
The government also says that Help to Buy is supporting responsible lending, with the average house price for the combined schemes at £186,000, or £156,000 for mortgage guarantee and £211,000 under the equity loan scheme, all of which are well below the UK average house price of £273,000.
The average house price to income multiple under the mortgage guarantee scheme is just over 3.5 times salary, and capped at a 4.5 times ratio to ensure responsible lending.
Figures for the mortgage guarantee scheme also show completions have been least concentrated in regions where house price growth is highest, for instance in London the scheme makes up just 1% of all mortgage lending compared to an average of 3% across the country.
‘Getting the keys to your first home is a moment that no one forgets. It’s about being able to start planning for the future and enjoying the security that you’ve worked hard for,’ said Prime Minister David Cameron.
‘But in the aftermath of the great recession the prospect of buying a first home was nothing more than a pipe dream for many thousands of hardworking people in Britain. Even those with a decent salary who could afford monthly mortgage payments were not able to get on the housing ladder because they could not find a deposit. Only those with access to big savings or the ‘bank of mum and dad’ could get the security together to buy a cherished home of their own,’ he explained.
‘That is now changing. Today, Help to Buy has helped thousands of hard working people buy a new home and enjoy the security and peace of mind that comes with that. And crucially, it’s playing a major part in increasing the number of new homes being built around the country, creating jobs and investing in communities,’ he added.
Chancellor George Osborne said there can be little doubt that Help to Buy is 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 home buyers, it’s good for the construction industry, and it’s great for the economy,’ he added.
House builders have also welcomed the role Help to Buy has played in boosting supply. Home Builders Federation executive chairman Stewart Baseley said that the increased certainty offered by Help to Buy has led directly to a significant increase in investment by house builders in land, the supply chain and labour.
‘By unlocking demand and making home ownership affordable for many thousands of young people and families the scheme has provided the impetus for house builders to step up production. Building high quality homes also boosts supply chains and cements tens of thousands of jobs and apprenticeships for young people in communities up and down the country,’ he explained.
‘Young people considering a career in house building today can be confident that ours is an industry with bold ambition and in need of talented, hardworking and enthusiastic people to build the communities of tomorrow,’ he added.
Source: Property Wire