fbpx
June 2021 | First-time Buyers

Help to Buy still vital for first-time buyers

Adrian Moloney is group sales director of Precise Mortgages

313,043 households. That’s roughly as many as there are in a city the size of Leeds. It’s a lot of people, a lot of families, a lot of hopes and dreams for the future.

It’s also the number of households which have been able to purchase a home thanks to the support of the Help to Buy Equity Loan Scheme since its launch in 2013.

The figure was recently announced by Housing Secretary Robert Jenrick to celebrate the 300,000th purchase made with help from the scheme.

Jenrick said the scheme had been more popular than ever in the three months leading up to the end of 2020 – with more than 21,000 completions, the highest quarterly total on record and 40% higher than the same period in 2019 – as well as revealing that the vast majority of purchases (82%) had been made by first-time buyers.

As you’re probably aware, the scheme moved into a new phase a couple of months ago.

The new Help to Buy Equity Loan Scheme (2021-2023) is now only available to first-time buyers purchasing a new-build property, and there are regional price caps in place, with each area of the country having a maximum property value.

The phasing out of the old scheme may well have had something to do with the rush towards the end of 2020, with second-time movers wanting to get their applications in before it was closed to them.

Buyers may also have been spurred into action before the price caps were introduced, which work out at 1.5 times the average price paid by first-time buyers in each region of England in August 2018. Or it could have been caused by the stamp duty holiday on the first £500,000 of property purchases introduced last summer, which will start to be phased out from the end of this month.

Whatever the reason for the surge, I firmly believe that Help to Buy will continue to be as popular with first-time buyers as it has been for the past eight years, especially as house prices in the UK are now the highest they’ve ever been.

According to the latest UK House Price Index, the average price in March stood at £256,000. This is £24,000 more than at the same time last year.

During that period, prices increased by 10.2%, marking the highest annual growth rate the UK has seen since August 2007.

That’s a lot of money to anyone, and especially for those looking to take their first step on the property ladder.

I believe that in times when it’s difficult for people to get on the property ladder, it is vital that they continue to receive all the support they need to ensure they can benefit from a scheme which has already played such an important part in helping tens of thousands of aspiring homeowners.

Precise Mortgages was one of the first specialist lenders to enter the Help to Buy market.

We recognise just how important the scheme has been, and we will continue to support it before it finally closes for business in 2023.