Mortgages  

Nine out of 10 Help to Buy 1 completions made by FTBs

The majority of completions under the Help to Buy equity loan scheme were made by first-time buyers, representing 92.1 per cent of total completions, data released by the government revealed.

Help to Buy equity loans are open to both first-time buyers and home movers on new-build homes worth up to £600,000. A deposit of at least 5 per cent is needed and the government will give you a loan for up to 20 per cent of the price, therefore a a 75 per cent loan to value mortgage is needed to cover the rest.

Government data published today (21 November), revealed that in the first six months of the scheme’s life (to the end of September), 5,375 properties were bought with the support of the Help to Buy.

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First-time buyers accounted for 4,948 (92 per cent) of total purchasers.

Around three-quarters (73.2 per cent) of total completions were by purchasers with a 5 per cent deposit; 15.7 per cent had a maximum of a 10 per cent deposit; 5 per cent had a deposit up to 15 per cent; and 6.1 per cent had a deposit that was higher than 15 per cent.

The total value of these equity loans was £208m, with the value of the properties sold under the scheme totalling £1.04bn.

The average price of a property bought under the scheme was £194,167, with an average equity loan of £38,703.

For the NewBuy Guarantee scheme, 676 home purchases were made in Q3 2013. This brings the total number of house purchases up to 4,450 since the launch of the scheme in March 2012.

Paul Smith, chief executive of estate agency Haart, said: “The latest figures for the take up of the first stage of Help to Buy are really encouraging especially for first time buyers.

“The early introduction of Help to Buy’s second guarantee phase at the start of October is proving to be a real fillip to the property market as it allows movement at all rungs of the property ladder, including both older and new homes. Coupled with continuing low interest rates and strong mortgage deals, sellers should pay heed and capitalise now on the very high levels of demand. Buyers are ready and waiting for properties so there is no better time to sell.”

Government statistics published earlier this month showed only ten of the 2,384 Help to Buy applications have already completed.

Previously, Ray Boulger, senior technical manager at broker John Charcol, told FTAdviser that Help to Buy 1 reservations for properties are around 2,500 per month and, if reservations continue at this current rate, the scheme will not last beyond two years.