New monthly record for Help to Buy in June

Encouraging figures show that the total number of homes sold under the Government’s Help to Buy scheme hit a new high during June.

Data indicates that 4,745 new homes were purchased under the equity loan part of the scheme, which represented the highest total since it began in April of 2013.

Rise

Since its inception, 112,803 mortgages have been set up through the Help to Buy scheme. The vast majority of these sales have been made to first-time buyers.

Made up of two parts-mortgage guarantee and equity loan-the Help to Buy initiative is seeing success in both areas. 56,401 homes have been sold under the mortgage guarantee section and incredibly, 56,402 have been sold under the equity loan scheme.[1]

However, despite its obvious success, the mortgage guarantee scheme is due to end in December 2016. The equity loan initiative, under which the Government takes a stake of up to 20% in the value of a home, is to continue until 2020.[1]

Exit

‘The stronger economy and financial system means we expect banks to start to exit our Help to Buy mortgage scheme and it was introduced in times of financial distress,’ said Chancellor George Osborne. Equity loans are going, ‘from strength to strength,’ he added.[2]

New monthly record for Help to Buy in June

From the start of the initiative, the majority of houses purchased under the scheme have been valued at under £200,000. Almost two-thirds of buyers put down the minimum 5% deposit required, with the Government lending each buyer £42,992 on average. Nearly half of households utilising the scheme earned less than £40,000 per year.[2]

Stewart Baseley, chairman of the Home Builders Federation, commented that Help to Buy was helping construction levels and is continuing to, ‘drive demand for new build homes.’[2]

[1] http://www.bbc.co.uk/news/business-34199318