Help to Buy mortgage scheme helps over 40,000 onto the UK housing ladder

Taylor Scott International News

Since the launch of the UK government’s flagship Help to Buy mortgage guarantee scheme over 40,000 loans have been completed with the overwhelming majority going to first time buyers. One of the main aims of the scheme was to get people onto the housing ladder and the official figures show that 40,079 have taken a loan and of these 78% were purchases by first time buyers. The data also shows that the total value of mort gages supported by the scheme is £5.9 billion and the mean value of a property purchased or remortgaged through the scheme was £156,031, compared to a national average house price of £272,000. Compared to total mortgage completions in each region, the scheme is supporting a higher proportion of mortgages in the North West and the East, and a lower proportion in London and the South East. Under the scheme, which was launched in October 2013, the government offers lenders the option to purchase a guarantee on mortgage loans where the borrower has a deposit of between 5% and 20%. The scheme can be used for mortgages on both new build and existing homes, by first time buyers, home movers and those remortgaging. In order to qualify for a loan supported by the Help to Buy mortgage guarantee scheme, there are a number of eligibility criteria which are set out in the scheme rules. For example, the scheme is not available on buy to let mortgages or second homes, and the property value must be £600,000 or less. Meanwhile, new research shows that the number of first time buyers relying on the ‘Bank of Mum and Dad’ for support has dropped significantly. Clydesdale and Yorkshire Banks’ annual first time buyers survey shows that 46% of the nation’s first time buyers needed help in saving for their deposit in 2014 compared with 63% in 2013 and 78% in 2012. ‘It has been very encouraging to see the recovery of the property market with lending to first time buyers at the highest level for seven years. It is also positive that the number of first time buyers relying on the Bank of Mum and Dad to get on the property ladder has decreased significantly,’ said Steve Fletcher, head of Clydesdale and Yorkshire Banks Retail Network. ‘This reflects the increased availability of first time buyer mortgages with a low deposit as well as growing economic confidence particularly among house buyers,’ he added. However, the research also shows some stark regional first time buyer differences with 27% in Yorkshire receiving support from their parents compared to 57% in the South West. Continue reading →

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