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Help to Buy Scheme continues to aid buyers
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Positive new figures have suggested that the Help to Buy Mortgage guarantee scheme is working in assisting new buyers get on the property ladder.
Statistics from the Mortgage Advice Bureau show that deposits for house purchases using the Help to Buy mortgage guarantee scheme were at their highest rates for 10 months in February. Users of the scheme put down deposits averaging £9,936 during the second month of the year, up from £9, 099, an increase of £9.2%.[1]
Increases
This rise meant that average Help to Buy deposits now stand at their highest rate since April 2014, where deposits averaged £11,483. Average deposits have also risen for the last three months, following a low of £7, 856 in November 2014.[2]
The Mortgage Advice Bureau estimates that prospective first-time buyers will also be greatly assisted by the upcoming Help to Buy ISA. Calculations indicate that borrowers will be able to reach the current average of £9,936 in just 15 months using this new scheme-10 months quicker than without using it.[3]
Help to Buy ISA
A person with a Help-to-Buy ISA will see the government give them an additional £50 for each £200 saved, up to a maximum of £3,000. This means that would-be buyers would have to save just £7,500 to reach the current deposit average, as the government would subsidise the additional funds. First-time buyer couples, who both open a separate Help to Buy ISA and save the allotted £200 per month could reach the current average deposit total in 20 months, compared to 25 months if they did not utilise the government’s support.[4]
Help to Buy Scheme continues to aid buyers
Head of lending at the Mortgage Advice Bureau, Brian Murphy, was quick to stress the importance of the Help to Buy scheme. Murphy said, ‘Help to Buy’s importance to easing affordability pressure is plain to see: the average deposit of those using the scheme remains far below those found in the wider markertplace.’ This, Murphy believes, gives, ‘first-time buyers access to the housing market in a far shorter timescale than would otherwise be possible without parental help.’[5]
He went on to state that,‘ the Help to Buy ISA will provide a further boost to first-time buyers, with the government effectively pledging to contribute a fifth of their deposits up to £15,000.’ Concluding, Murphy said that, ‘the arrival of the new ISA scheme will be another step towards making homeownership a realistic goal for first-time buyers on average incomes.’[6]
[1-6] http://www.propertyflock.co.uk/f/093FDFDE3
