Help to Buy is delivering its “intended objectives” by supporting new housing constructions and being used by first-time buyers, the Council of Mortgage Lenders said, following new Treasury data on the scheme.
The Treasury data published today (2 September) revealed that combined purchases through the Help to Buy equity loan and mortgage guarantee schemes have accounted for a little under 6 per cent of houses bought in the last 15 months.
The figures revealed that 79 per cent of purchases with a mortgage guarantee were completed by first-time buyers, compared to 85 per cent for those buying with an equity loan.
The average price of property bought through Help to Buy mortgage guarantee was £153,148, compared to an average of £259,500 for all home purchases.
In the second quarter of this year, the number of completions through the Help to Buy mortgage guarantee scheme increased from around 6,300 to 11,200.
In May and June, however, completions appeared to have levelled off at around 4,000 a month. Equity loan purchases, which support housing construction, totalled almost 8,000 in the second quarter.
The data also showed that, compared to total mortgage completions in each region, the mortgage guarantee scheme is supporting a higher proportion of purchases in the north west, the east and Scotland, and a lower proportion in London and the south east.
Paul Smee, CML director general, said: “It is reassuring to see the data confirming that Help to Buy is essentially delivering its intended objectives.
“The scheme is supporting new housing construction, and is being used extensively by first-time buyers to purchase average-priced properties in all parts of the UK.”
In June, the Public Accounts Committee’s report into the equity loan phase said the government has “yet to demonstrate” that the scheme provides value for money, hinting that the committee thought it was rushed through.
The MPs also said while the scheme has proved popular in certain regions, it has failed in its objective as it enjoyed less traction in London and the south-east where first-time buyers are struggling the most, with 6 per cent of equity loans being for purchases in the capital.