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Half a million homes bought with Help to Buy schemes

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  • 26/02/2019
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Almost half a million properties have been bought since 2013 using one of the government’s Help to Buy schemes, new figures reveal.

 

Statistics from the Ministry of Housing, Communities and Local Government show 494,108 completions have taken place using one or more Help to Buy schemes and more than 93 per cent took place outside of London.

The Help to Buy equity loan scheme supported around 1,000 sales a week in 2018, the data shows.

And first time buyers have now opened 1.4 million Help to Buy: ISAs, which offer government bonuses of up to £3,000.

In total, 194,379 completions have taken place across the UK since the Help to Buy ISA launched in December 2015.

The London Help to Buy scheme – which provides an equity loan of up to 40% for buyers in the capital with a 5% deposit – has helped 15,056 buyers across 33 boroughs purchase their own property between February 2016 and September 2018.

 

Mortgage prisoners

Gemma Harle, managing director of the Intrinsic mortgage network, warned that the scheme had flaws including the risk of leaving some people as mortgage prisoners.

“Another problem in regards to the Help to Buy equity loan scheme in particular, is that some first time buyers are being left as mortgage prisoners,” she said.

“Those who first took out five-year fixed rate mortgages back when the scheme started are now having to both repay the equity loan and needing to remortgage in a higher interest rate environment.

“Added to this, there is distinct lack of remortgaging options from lenders in the market involved in the scheme leaving people trapped paying an expensive variable rate mortgage,” she added.

Kate Davies, executive director of the Intermediary Mortgage Lenders Association (IMLA), said: “These statistics show that Help to Buy has become a cornerstone of the UK property market. The government’s programme continues to stimulate the bottom of the housing ladder, providing essential support to the whole of the UK property sector.”

Data published last week showed first-time buyer figures reached their highest number since the financial crisis in 2018 thanks to competitive rates and government schemes.

But the Help to Buy schemes are due to close over the next four years with a more targeted scheme for first-time buyers only from 2021 to 2023 and to houses with a market value up to new regional price caps, including £186,100 in the north east stretching up to £600,000 in London.

Davies said: “Given the important role Help to Buy plays in lifting households into home ownership and the large number of people who have not been able to climb onto the first rung of the property ladder, long-term solutions are required to ensure the continuing prosperity of the housing market, post-2023.”

Minister of State for Housing, Kit Malthouse MP, said: “This government is committed to helping more people get on the housing ladder as we power through to delivering 300,000 homes a year by the mid-2020s.

“Our Help to Buy equity loan scheme has supported more than 190,000 households in purchasing their home, helping to make the dream of home ownership a reality for a new generation.”

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