Help to Buy purchases up 61% year-on-year

Jessica Bird

August 13, 2021

Between 1 January and 31 March 2021, 15,341 properties were bought with a Help to Buy equity loan, according to data from the Ministry of Housing, Communities & Local Government.

Since 1 April 2013, 328,506 properties were bought with an equity loan, with the total value of the equity loans reaching £20.1bn, and the value of properties sold reaching £91.1bn.

Of all completions, 82% have been first-time buyers, totalling 270,104 properties, using a total value of equity loans of £16.4bn.

The overall value of properties sold to first time buyers total £72.5bn.

In Q1 2021, Help to Buy: Equity Loan provided equity loans to a total value of of £1,158m.

These equity loans supported the purchase of £5,051m-worth of property.

Of these properties, 12,472 (81%) were bought by first time buyers, using a total value of equity loans of £941m to purchase property worth a total of £3,985m.

The total number of completions in Q1 2021 was down by 27% compared to the previous quarter, but up by 61% compared to Q1 2020.

Completions in Q3 2020 were, on average, up 12% compared to 2019, ranging from a 0% change in London to a 22% increase in the North East.

In Q4 2020, all regions saw an average increase of 40% in completions against 2019, with the North East and London seeing the largest increases of 53% and 52% respectively.

Since the launch of the Help to Buy: Equity Loan scheme on 1 April 2013, 31,272 properties have been bought with an equity loan in London.

In the year to 31 March 2021, 6,804 home purchases were completed under the Help to Buy: Equity Loan in London, up by 10% on the year to 31 March 2020 (6,169 completions).

In London, first-time buyers bought 6,541 properties under the scheme in the year to 31 March 2021, up by 11% on the year to 31 March 2020 (5,881 completions).

In London, the maximum equity loan was increased from 20% to 40% in February 2016, since then there have been 27,041 completions in London.

Of these, 24,135 were made with an equity loan higher than 20% and 21,352 were made with an equity loan of exactly 40% of the purchase price, showing that most home purchases completed in London under the scheme used the full 40% equity loan available to them.

The Help to Buy: Equity Loan scheme can be used to purchase a new build property up to the value of £600,000, with a maximum equity loan of £120,000 (20%), or £240,000 (40%) in London.

Since April 2013, the mean purchase price of properties bought through the scheme was £277,264, with a mean loan of £61,217.

Up to 31 March 2021, 18% of all transactions were for flats and 82% were for houses, split among detached, semi-detached and terraced houses, and two bungalows.

Proportionally, first-time buyers purchased more flats, terraced and semi-detached properties, but fewer detached houses than existing owners.

More than a half (54%) of all home purchases were made with a deposit up to 5% of the property purchase price at the point of sale and 23% with a deposit ranging between 5% and 10%.

The remaining 23% were made by purchasers who paid a deposit of 10% of the property value or more.

A greater proportion of first-time buyers (58%) put down a deposit of 5% or less of the property purchase price, compared with existing homeowners (36%).

There was also a difference between the proportion of first-time buyers (10%) and non-first-time buyers (29%) that used a deposit of more than 15%.

To 31 March 2021, 49% of the Help to Buy: Equity Loan borrowers had household incomes between £20,000 and £50,000.

Only 1% and 5% of applicants had household incomes below £20,000 and above £100,000, respectively.

The majority of first-time buyers (52%) using Help to Buy: Equity Loan to purchase a property had household incomes ranging between £20,000 and £50,000.

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