The Government’s much-criticised Help to Buy mortgage guarantee scheme has supported over 7000 home loans worth a total of around £1 billion since it was launched back in October, official figures have shown.
The figures, which demonstrate the first six months of the mortgage scheme have been released by the Treasury and show the mean value of a property purchased/re-mortgaged through the scheme was over £150,000, which is well below the average house price of £252,000 that was recorded by the Office of National Statistics. The Treasury announced that 80% of the supported loans were given to first-time buyers and a large proportion of the market that was being helped is outside of London and the South-East.
Prime Minister David Cameron commented on the figures, and the data which showed that more than 20,000 people have bought new build homes using the separate equity scheme, saying that his Government had helped both builders and buyers. He said that being British, it is in most people’s instincts to want to own a home and ‘put down roots’ by planning for the future. He said that Help to Buy has helped millions of hardworking people buy a new home and is helping to increase the number of new homes around the country- a crucial move as the population grows.
An MP for the Labour party counteracted this by saying that whilst it is good to help first time buyers get on the property ladder, the Government must also make sure that rising demand for housing is matched by rising supply if the scheme is going to help low and middle income earners buy their first home.
The second part of the Help to Buy scheme offers lenders a taxpayer backed guarantee on loans of up to 95% of a property’s value on homes costing up to £600,000. This part of the scheme was designed to assist first time buyers and those struggling to move up the property ladder by making it easier for people to buy with low deposits. However it has been criticised by some industry experts for serving the demand for homes without addressing the demand for supply. There have been calls for it to be withdrawn or limited, particularly in the South East where annual price rises have been larger.
The Treasury figures show that just 5% of Help to Buy mortgages have been carried out in London.
If you wish to get advice on the Help to Buy scheme, call the Mortgage Express Contact Number.