Most of the home purchases under the Help to Buy Equity Loan scheme were by first-time buyers

Michael Lloyd

August 16, 2018

Most of the home purchases in the Help to Buy: Equity Loan scheme were made by first-time buyers, accounting for 136,657 (81%) of total purchases, The Ministry for Housing, Communities and Local Government (MHCLG) has found.

And the overall value of properties sold to first-time buyers under the scheme totalled £32.81bn, which was 78% of the total value of properties sold.

Craig Hall, new build manager, Legal & General Mortgage Club, said: “Help to Buy has evidently become an important part of our housing market, consistently helping more than 80% of first-time buyers get on the property ladder and supporting growing families with moving up the ladder”.

“Whilst the scheme certainly eases the issues with affordability and a raising a large deposit, over recent years we have seen mortgage lenders improving their core new build offering, providing further choice and reducing the dependency on the scheme for many borrowers”.

“It’s no secret that we need to build over 300,000 new homes a year to keep up with demand; and the government will need to find a range of solutions in order to help meet this target.

“Whether it’s guaranteeing the scheme post-2021, increasing support for other affordable schemes such as shared ownership, or relaxing planning restrictions, we need new supply entering the market – stimulating growth and allowing it to better serve those who need it most.”

Over the period since the launch of the Help to Buy: Equity Loan scheme, from 1 April 2013 to 31 March 2018, 169,102 properties were bought with an equity loan.

The total value of these equity loans was £8.93bn, with the value of the properties sold under the scheme totalling £42.23bn.

The mean purchase price of a property bought under the scheme was £249,708, compared with a mean equity loan of £52,834.

In London, the maximum equity loan was increased from 20% to 40% from February 2016, and since then to March 2018, there were 7,978 completions in London. And 6,548 of these were made with an equity loan higher than 20%.

Steve Seal, director of sales and marketing, Bluestone Mortgages, said: “These latest statistics highlight the sheer number of borrowers relying on Help to Buy, accounting for 81% of total first-time buyer purchases in 2017.

“It is great to see the development of schemes designed to assist consumers who would otherwise struggle to access the property ladder.

“The market contains pockets of borrowers like first-time buyers, who require extra support to reach their homeownership aspirations, particularly as the cost of living becomes ever more expensive.

“As an industry it is essential that we ensure that provisions are in place to cater to a wide range of needs.

“Specialist lenders play an important role in this, helping the pool of customers struggling to secure funding after being deemed too ‘high risk’ by mainstream lenders.

“Many of these, such as the self-employed, can demonstrate affordability but are unable to fit traditional criteria because of factors such as unpredictable income streams.

“By assessing individual circumstances on a case by case basis, these lenders can deliver the best suited products to those who need them most.”

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