TGS


News story: Help to Buy: helping first-time buyers onto the housing ladder

Since the launch of the two parts of Help to Buy, the equity loan and mortgage guarantee schemes:

82% of scheme completions have been made by first-time buyers the average house price was £187,800, significantly below the national average more than 48,000 people have bought a home through the scheme 94% of Help to Buy completions took place outside of London

Today’s Help to Buy official statistics show that the government’s scheme is successfully targeting the people that need it most, having helped almost 40,000 first-time buyers onto the housing ladder since the scheme launched last year.

Out of a total of 48,393 Help to Buy completions to date, 82% have been made by first-time buyers.

This demonstrates that while Help to Buy continues to account for only a small percentage of overall mortgage transactions (2.5% for mortgage guarantee and 4% for equity loan), the scheme successfully targets those who need a helping hand to get on the housing ladder.

Help to Buy also continues to support responsible lending: the average house price for both parts of the scheme, at £187,800 (£153,148 for the mortgage guarantee and £209,390 for the equity loan scheme), remains significantly below the national average house price of £265,000.

The Chancellor has been clear that responsible lending is a core aspect of Help to Buy. On 26 June he announced that new mortgage guarantee loans would be restricted to 4.5 times borrowers’ income, in line with the introduction of a loan-to-income limit on mortgage lending by the Bank of England.

This introduced a further safeguard to ensure that the mortgage guarantee scheme continues to support responsible lending.

Access HM Treasury’a infographic which breaks down the data.

Continuing the trends that started to emerge in previous Help to Buy figures, today’s official statistics show that the scheme is benefiting every region of the country.

While Help to Buy completions have been least concentrated in areas where house price growth has been highest, the highest number of mortgage guarantee scheme completions has been in the North West, and the highest number of equity loan scheme sales has been in the South East.

Overall, 94% of the total 48,393 completions under the scheme have been made by households outside of London.

The equity loan scheme in particular is also helping to drive an increase in the number of homes that are being built in the UK.

At the same time the construction sector has been growing for 15 consecutive months, and is currently experiencing the sharpest rise in house building orders since 2003, while companies are taking on new workers at the fastest rate since 1997.

Access the data on Help to Buy: mortgage guarantee scheme.

Access the data on Help to Buy: equity loan scheme.

Today’s statistics follow recent positive indications about the UK housing market.

Mortgage approvals grew by 14% in the year to June, with total property transactions growing by the same amount. Last year successful applications for major housing schemes were up by 23%, and planning permissions were granted for 216,000 new homes.

New housing starts have begun to respond, growing by 20% in the year to Q2 2014.

The Chancellor said:

It’s great to see that nearly 40,000 first time buyers have been helped onto the housing ladder by the Help to Buy scheme.

This is a key part of our long term economic plan, which is supporting hard working people to secure a better future for their families.

Importantly, Help to Buy is also driving a big increase in house building in Britain, boosting the construction industry and increasing housing supply.

Chief Secretary to the Treasury, Danny Alexander, said:

I am delighted that over 48,000 people have already been helped onto or up the housing ladder as a result of the Help to Buy scheme.

Today’s figures show that the government is delivering on its commitment to make home ownership a reality for as many households across the country as possible.

House builders have also welcomed the role Help to Buy has played in boosting supply. Home Builders Federation Executive Chairman Stewart Baseley said:

The Help to Buy equity loan scheme is helping thousands of people buy their own home every month.

This increase in demand is allowing builders to significantly increase the number of new homes being built – homes that the country desperately needs.

To enable it to increase housing building rates, the industry is recruiting thousands of apprentices and new employees and boosting supply chains and local economies the length and breadth of the country.

Help to Buy headline figures Scheme Mortgage guarantee Equity loan Help to Buy combined Total transactions Number of completions 18,564 29,829 48,393 731,500 Average (mean) value of property £153,148 £209,390 £187,815 £265,000 Percentage of first time buyers 79% 85% 82% 31% Percentage outside London and the South East 81% 77% 79% 64% Borrower income (median) £42,482 n/a n/a £43,000 Help to Buy regional breakdown: total equity loan and mortgage guarantee completions Region Mortgage guarantee completions Equity loan completions Help to Buy completions South-East 2,505 4,996 7501 East 1,865 4,103 5968 South-West 1,486 3,785 5271 North-West 2,513 3,667 6180 West Midlands 1,603 3,272 4875 East Midlands 1,586 3,264 4850 Yorkshire and the Humber 1,712 3,010 4722 London 965 1,872 2837 North-East 851 1,860 2711 Scotland* 2,298 - 2298 Wales* 899 - 899 Northern Ireland* 276 - 276 Total UK 18,559** 29,829 48,388**

*Mortgage guarantee only

**Regional total differs from UK total due to completions with unrecognised postcodes or allocated to Channel Islands or Isle of Man

Top ten local authorities for Help to Buy Local Authority Mortgage guarantee completions Equity loan completions Help to Buy completions Leeds 260 503 763 Wiltshire UA 126 528 654 Birmingham 241 348 589 Central Bedfordshire UA 108 453 561 County Durham UA 143 346 489 Milton Keynes UA 75 406 481 Peterborough UA 60 417 477 Bradford 116 347 463 Manchester 100 326 426 Liverpool 124 279 403 Morgage guarantee regional breakdown Region Number of completions Average scheme property value Average regional value* South East 2,505 £206,889 £326,000 East 1,865 £181,434 £274,000 South West 1,486 £168,521 £241,000 North West 2,513 £125,784 £171,000 West Midlands 1,603 £140,407 £194,000 Yorkshire and the Humber 1,712 £124,073 £173,000 London 965 £284,151 £499,000 North East 851 £114,230 £150,000 Scotland 2,298 £116,767 £193,000 Wales 899 £116,268 £167,000 Northern Ireland 276 £100,519 £137,000

*ONS house price index June 2014

Regional percentage of Help to Buy: Mortgage guarantee lending Region All regulated mortgage lending per region* Mortgage guarantee per region Mortgage guarantee as % of regional lending South East 22.9% 13.5% 1.5% East 4.1% 10.0% 6.2% South-West 9.0% 8.0% 2.3% North-West 9.2% 13.5% 3.8% West Midlands 7.7% 8.6% 2.9% East Midlands 7.3% 8.5% 3.0% Yorkshire and the Humber 7.8% 9.2% 3.0% London 13.5% 5.2% 1.0% North-East 4.2% 4.6% 2.8% Scotland 8.5% 12.4% 3.7% Wales 4.1% 4.8% 3.0% Northern Ireland 1.7% 1.5% 2.2% Total UK: 100% 100% 2.5%

*CML data for Q4 2013 and Q2 2014

Mortgage guarantee data is for the period October 2013 to June 2014. Equity loan data is for the period April 2013 to Jult 2014.

https://www.gov.uk/government/news/help-to-buy-helping-first-time-buyers-onto-the-housing-ladder

seen at 10:30, 2 September in Announcements on GOV.UK.
Email this to a friend.