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Help to Buy and shared ownership demand reaches high among first-time buyers

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  • 18/02/2021
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Help to Buy and shared ownership demand reaches high among first-time buyers
Some 17 per cent of first-time buyers used either the Help to Buy equity loan or shared ownership to purchase their home last year, with demand for each initiative reaching their peaks.

 

Analysis from Reallymoving showed this was up from 15 per cent in 2019 and 13 per cent in 2018. 

Shared ownership appeared to be the favoured option for first-time buyers as it accounted for 10 per cent of all transactions among this group compared to the seven per cent who used Help to Buy. 

Rob Houghton, CEO of Reallymoving, said: “Based on the current average first-time buyer purchase price of £249,000 in the UK, buying a 10 per cent stake in a shared ownership property could require a five per cent deposit of just £12,460 – an attractive prospect for those looking for an affordable way onto the housing ladder.   

“We’re now seeing record levels of first-time buyers using either shared ownership or Help to Buy, with the impact of the pandemic boosting demand further as buyers struggle to raise even larger deposits required by lenders, on top of higher house prices.” 

 

Help to Buy use 

Figures released by the Ministry of Housing, Communities and Local Government (MHCLG) today also showed drive in first-time buyer Help to Buy use as during Q3, 84 per cent of purchases came from this group. 

During the quarter, 13,211 properties were purchased using the scheme with those buying their first home accounting for 11,150 transactions. 

The use of the scheme in Q3 more than doubled from the 5,827 completions in Q2, likely reflecting the closure of the property market due to the pandemic.

Unsurprisingly, demand for Help to Buy dipped to 43,617 purchases in the year to 30 September, down from a peak of 52,924 in 2019.   

 

Prices soaring

Record high property prices seen over the year were reflected in Help to Buy purchases. The average property price for first-time buyers using the scheme in the year to 30 September was £279,995 – £10,000 more than the same period a year before. Meanwhilehomemovers paid an average of £346,995 compared to £329,995 in 2019. 

Vikki Jefferies, proposition director at Primis Mortgage Network, said: ‘’The government’s Help to Buy scheme continues to be hugely popular among borrowers – particularly first-time buyers. 

“Current demand is also likely to continue as the financial impact of Covid-19 on households becomes clearer and more first-time buyers look to take advantage of government support to help them get onto the property ladder. 

She added: “There is a real opportunity here for advisers. By supporting borrowers with their decision-making, advisers will ensure that borrowers are knowledgeable about the government support that is available to them.  

By sharing this information, advisers will be able to give first-time buyers the confidence they need to take their first steps onto the property ladder and ensure that, ultimately, this group can contribute to the ongoing recovery of the housing market.’’ 

 

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