Average Price of Affordable Home is Around £190,000

The average price paid for a home under an affordable housing scheme has hit around £190,000, according to research by the Halifax.

The average price of £189,786 is just 4%, or £7,750, lower than the average of £197,535 for house purchases as a whole.

Regionally, the highest average price paid by a buyer using an affordable housing scheme is in London, at £323,148. The lowest average price, of £147,437, is in the North of England.

Average Price of Affordable Home is Around £190,000

However, the average price of a property sold in the capital under one of these schemes is 33% lower than the overall London price of £482,579.

The study also reveals that first time buyers benefit the most from affordable housing schemes, accounting for 80% of Help to Buy purchases, compared with just 46% of all mortgage-financed property purchases made by first time buyers over the same period.

In the past 12 months, economic recovery and Government schemes, such as Help to Buy, have aided the highest number of first time buyers to purchase a home for seven years.

Recent official data shows that Help to Buy equity loans and mortgage guarantee schemes and NewBuy have helped 99,601 buyers purchase a home since Help to Buy was launched in the 2013 Budget.

First time buyers made four out of five, or 79,680, of these purchases.

The average price paid by first time buyers using these schemes is £150,361, around 10%, or £16,732, lower than the average price paid generally by first time buyers, at £167,093.

First time buyers in London experience the greatest benefits from affordable housing schemes, with an average price of £236,733, which is 36% lower than the average price paid by a first time buyer generally, at £367,961.

Mortgages Director at the Halifax, Craig McKinlay, says: “Many of the affordable homeownership schemes available have been designed specifically to help first time buyers get on the ladder and support construction of new build homes and the latest official figures show this has been successful.

“As the economy continues to recover and mortgage interest rates remain at very low levels, we expect to see continued growth in first time buyers during the second half of the year.”¹

The research also analysed the profiles of borrowers buying a home under affordable housing schemes, to determine typical users. It discovered that 17% of affordable housing transactions in the 12 months to May 2015 were in Scotland, followed by 15% in the South East and 10% in the North West.

Comparatively, 20% of all housing transactions were in the South East, 12% in Scotland and 10% in London.

The average annual income of a homebuyer using an affordable housing scheme is £31,886, 5% lower than the average earnings of all those in full time employment, of £33,475.

Regionally, the average earnings of buyers under these schemes ranges from £50,254 in London to £29,031 in the North West.

Affordable housing schemes have especially helped younger buyers, with 37% of all buyers using a scheme aged from 20-29, compared to just 25% of all home buyers.

¹ http://www.propertywire.com/news/europe/uk-affordable-homes-research-2015072710791.html