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Help to Buy shows no signs of slowing down, particularly in London
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The total value of properties bought using the Government’s Help to Buy scheme exceeded £60bn in the second quarter of 2019. The amount of Help to Buy properties purchased has increased year-on-year, since the scheme first began in 2013 and shows no sign of slowing down.
In 2013, 14,023 completed transactions were recorded, whilst in 2018, this number reached over 52,000. The latest figures for 2019 show that the year is on track to reach similar or higher figures, with 25,275 completed transactions just in the first half of the year. The majority of these sales were to first-time buyers, but the number of buyers already on the property ladder has gradually climbed too.
This increased growth is to be expected as Help to Buy becomes more well known, but the Government is planning to replace the scheme in March 2021 with something that is only available to first-time buyers.
Andrew Southern, chairman of property development company, Southern Grove says:
“Almost a quarter of a million homes have now been purchased since Help to Buy was launched six years ago. And the feeding frenzy at the Help to Buy table shows no signs of slowing down.
“However, looming large over the frenetic activity is the March 2021 cut-off, when the scheme is replaced with one which will only be available to first-time buyers and will set regional property price caps.
“This deadline is likely to inject even more urgency into the market. And first-time buyers, unperturbed by Brexit uncertainty, are already showing increased eagerness to make the most of these equity loans while they can, with the number of purchases using Help to Buy growing 8% year-on-year.”
In 2016, the maximum equity loan was increased from 20% to 40% in London, bringing with it a spike of first-time buyers using Help to Buy in the city. In 2019, of the 15,623 completed Help to Buy transactions in London, 95% were to first-time buyers.
Andrew Southern believes that this highlights the difficulty of getting onto the property ladder in the capital:
“Demand has been particularly strong in London with properties bought by first-time buyers using the scheme increasing by more than a quarter compared to last year.
“It is notable, however, that 75% of purchases are made using the full 40% equity loan, emphasising the challenge of buying a property in the capital with its high prices.”
