Help to Buy 2 house prices fall again
The value of Help to Buy mortgage guarantee purchases in May were 3% lower than April and 4% less than March.
Your average Help to Buy 2 property now costs £147,002, 64% of the typical purchase price of 231,126.
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “It is refreshing to see that in a climate of rising house prices, activity supported by the Help to Buy mortgage guarantee remains firmly rooted at the entry point to the property ladder – far removed from the feeding frenzy that’s been seen of late at the top end of the London market.”
The typical deposit on Help to Buy 2 homes fell below £10,000 to £8,722 in May, nearly eight times lower than the average deposit for house purchases of £69,238.
Murphy added: “With the Bank of England now limiting the volume of new mortgages above 4.5x loan to income (LTI) across the whole market, the Treasury’s decision to go one step further and prevent any HTB2 activity above 4.5x LTI should silence the remaining critics and instil confidence that HTB2 is only granting loans on a robust and affordable basis.”
“The majority of Help to Buy activity is taking place in the Midlands and the North, so this slight tightening of criteria should only have a modest impact and the scheme will remain an attractive proposition to many aspiring owners.
“The downside of applying this cap unilaterally to all Help to Buy 2 loans is that it makes no allowance for any regional differences and disadvantages borrowers in areas where property prices are highest – lifting the bottom rung of the ladder even further out of reach for some.”