The new homes director at national intermediary Mortgage Advice Bureau said analysis of mortgage applications made through the firm revealed that price inflation on new-build properties had fallen from 4 per cent to 2 per cent during the past 12 months.
Data revealed that buyers with equity loans were paying 22 per cent less than the UK average house price, with buyers on average having to quadruple the deposit needed to get the same loan-to-value on the same property without the equity loan – the equivalent of an additional £50,349, or one and a half years’ earnings.
Mr Frankish said the extension of the scheme represented “good sense”, and was helping to keep the property ladder in reach for first-time buyers, with MAB analysis showing that applicants were on average five years younger than the typical buyer seeking a mortgage at 32 years old, and earning 16 per cent less at £32,668 a year.
He added: “The scheme’s arrival has also worked wonders to keep down the costs of buying a new-build home.
“Improving the supply of housing is having an immediate and powerful effect on house prices by keeping inflation in check and avoiding a scenario where aspiring owners are priced out of the market.”
| Key findings: |
• Average price paid by first-time buyers across all property types: £190,000 • Average price paid with a Help to Buy equity loan: £186,477 • Average price paid for a new-build home: £238,000 Source: MAB/ Office for National Statistics |
Adviser View
Ashley Brown, director of London-based independent mortgage broker Moneysprite, said: “Buyer confidence is back, and encouragingly it is first-time buyers who are driving the market again, aided by a reassuring arm around the shoulders from the Help to Buy scheme.”
