159,000 properties sold with Help to Buy Equity Loan

Michael Lloyd

April 26, 2018

Nearly 159,000 properties have been purchased using the Help to Buy Equity Loan scheme since it launched (1 April 2013 to 31 December 2017).

Figures from The Ministry of Housing, Local Government and Communities found the total value of these equity loans was £8.27bn, with the value of the properties sold under the scheme totalling £39.28bn.

Most of the home purchases in the Help to Buy: Equity Loan scheme were made by first-time buyers, accounting for 128,317 (81%) of total purchases.

Craig Hall, new build manager, Legal & General Mortgage Club, said: “Help to Buy continues to play a fundamental role in helping first-time buyers step onto the property ladder, accounting for 81% of total first-time buyer purchases and around 20% of new build additions in 2017.

“To date, this is the largest number of completions per quarter and as numbers continue to rise year-on-year, the scheme is clearly being used more than ever before by those who need it most.

“As many are aware, however, the future of the scheme has still not been guaranteed post-2021 and with an increasing number of lenders entering the Help to Buy market, we need to have a decision made sooner rather than later to allow for long-term planning.

“In the meantime, though, for those who are beginning to repay their Help to Buy loan, getting in touch with a mortgage broker is a good place to start.

“Providing clarity, mortgage brokers play a key role in helping costumers understand the different options in available, whether that’s paying off the loan in parts or full, remortgaging, or a product transfer.”

The mean purchase price of a property bought under the scheme was £247,230.

The corresponding value of these equity loans at point of legal completion was £6.50bn (79%) of the total value of equity loans). The overall value of properties sold to first-time buyers under the scheme totalled £30.47bn, 78% of the total value of properties sold.

Most completions of the Help to Buy Equity Loan scheme (25 %) were in the £150,001 – £200,000 range, with 85% of completions less than £350,000.

The £150,001 – £200,000 range also accounted for the greatest proportion of homes purchased by first-time buyers (28%).

As expected, there were proportionately more first-time buyers in the lower price ranges and less in the higher ranges.

The mean purchase price was £237,495 for first-time buyers, £288,099 for non-first-time buyers and £247,230 when considering all completions.

Since the launch of the Help to Buy Equity Loan, from April 2013 to the end of 2017, 11,094 properties in London were bought with an equity loan.

Since 1 February 2016 Help to Buy applicants were able to claim an equity loan up to 40% of purchase price for properties in Greater London.

Between 1 February 2016 and 31 December 2017 there were 6,867 completions in London (in 33 boroughs), of which 6,547 were made by first-time buyers.

The property type most frequently sold under the scheme was semi-detached houses, representing 31% of total completions, followed closely by detached properties at 30%.

First-time buyers purchased proportionately more flats and terraced properties and fewer detached houses.

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