First-time buyers are rushing to market before the Help to Buy mortgage guarantee scheme expires at the end of the year, research from Connells Survey and Valuation suggests.
In September 2016 the number of first-time buyer valuations rose by 18.7% year-on-year, outstripping remortgage (14.7%) and buy-to-let (0.4%) activity.
John Bagshaw, corporate services director of Connells Survey & Valuation, said: “Smart first-time buyers have been anticipating the end of the Help-to-Buy mortgage guarantee scheme and locking into it.
“Given the government confirmed the scheme would close this year in an announcement made at the end of September, those first-time buyers who have been jumping on the band wagon have been shown to be absolutely right!”
But Bagshaw didn’t’t expect first-time buyer activity to fall off a cliff once the scheme expires.
He added: “There are now more than 30 lenders offering 90-95% loans outside Help-to-Buy so the scheme’s not as important to the market as it was.
“And other Help to Buy schemes will continue until 2020, including the five-year, interest free equity loans for new build homes and the Help to Buy ISA.
“On top of that, Philip Hammond has said he wants to prioritise spending on new homes and borrow an extra £2bn to speed up their construction.
“In his conference speech he said he would use ‘all the tools at its disposal’ to increase the amount of new housing stock, to help make housing more affordable.
“That should also work out well for first-time buyers, too.”