MortgagesJul 31 2014

Help to Buy completions jump 91% in June

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by

The Help to Buy equity loan scheme seems to be more popular than ever, with a 91 per cent rise in completions during June, taking the total number of home purchases supported to 27,167 since the scheme’s inception in March 2013.

In June there were 4,357 completions, up from May’s 2,274 completions. In total over the second quarter there were 7,772 completions, up from 6,524 in the previous three months.

Equity loans are open to both first-time buyers and home movers on new-build homes in England with a purchase price up to £600,000. Buyers with as little as 5 per cent deposit borrow up to 20 per cent of the price of the property from the government.

The total value of the equity loans since inception was £1.13bn, with the value of the properties sold under the scheme totalling £5.65bn. The mean purchase price of a property bought under the scheme was £207,967, compared with a mean equity loan of £41,413.

Most of the home purchases in the Help to Buy equity loan scheme were made by first-time buyers, accounting for 85 per cent of total purchases.

There have been concerns that the controversial property scheme is causing a housing bubble, however data published today (31 July) by Nationwide revealed that it looks as though the Mortgage Market Review is beginning to slow the market down.

Nationwide’s monthly house price index showed annual house price growth slowed to 10.6 per cent in July from 11.8 per cent in June.

Robert Gardner, Nationwide’s chief economist, said: “The mortgage approvals declined by almost 20 per cent between January and May, and there has also been some softening in forward looking indicators, such as new buyer enquiries.

“At least part of the slowdown in activity relates to the introduction of Mortgage Market Review measures. The modest rebound in mortgage approvals in June adds weight to the notion that the slowdown will prove temporary, though the underlying pace of demand remains unclear.”

Yesterday (30 July), the Council of Mortgage Lenders revised its market forecasts, stating that while gross lending looks set to rise above £200bn for the first time since 2008, growth will continue at “a more sedate pace” in 2015, as momentum in the housing market diminishes under growing affordability pressures.