Help To Buy helps 54,000 become home owners

New figures show Help to Buy is helping more people onto the property ladder and getting more homes built.

The Help to Buy schemes have created over 54,000 homeowners in England Housing Minister Brandon Lewis announced today.

The new figures show how Help to Buy is helping more and more people onto the property ladder and getting more homes built, with over 39,000 households buying new-built properties through the equity loan and NewBuy options, and 15,000 households buying through the mortgage guarantee.

September saw 25,800 first-time buyer completions – up 11% compared to 23,200 a year ago. In addition, the average first-time buyer deposit fell 8% year-on-year to £26,134, despite purchase prices rising.

Average first-time buyer deposit now represents 67.6% of annual first-time buyer income – down 12 percentage points year-on-year

A further 3,400 new homeowners have been created in Scotland, Wales and Northern Ireland through the Help to Buy: mortgage guarantee.

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House building and the Help to Buy schemes are key parts of the government’s long-term economic plan. Around 8 out of 10 sales went to first time buyers and as a direct result thousands of new home owners were created and private house building starts rose by a third.

House building has climbed to the highest level since 2007, construction output has seen the sharpest expansion for 8 months, and companies are now taking on workers at the fastest rate since 1997.

Sales of new build homes have been strong across the country. The highest number of equity loan sales were in Wiltshire with 603 sales, Leeds with 559 sales, and Central Bedfordshire with 499 sales. 20 local authorities have all achieved over 300 sales.

Housing Minister Brandon Lewis said:

“Today’s figures clearly demonstrate the continuing success of the Help to Buy in supporting creditworthy, hardworking people who want to buy a home of their own.

“Over 54,000 new homeowners have now used the schemes as a valuable alternative to the Bank of Mum and Dad, enabling them to buy with a fraction of the deposit they would normally require.

“But it’s also got Britain building and since the scheme’s launch private house building starts has increased by a third.”

David Newnes, director of estate agents Your Move and Reeds Rains, comments:

“The first-time buyer market has proved largely resilient to the wider cooling in the housing market over the last few months. While property price rises have begun to slow and total lending levels have also dipped, first-time buyer demand has kept a steady pace. There was a slight drop-off in activity in September, but this had less of an impact than the similar drop-off we saw last year.

“First-time buyers continue to be a key component of the engine powering the housing market recovery. Many worthy borrowers are only just seeing their finances recover after the financial crisis, and are now in a position to buy.

“Help to Buy has helped keep the blood pumping in the first-time buyer market over the last year, allowing borrowers struggling to save for a deposit the financial life support they need to purchase property.

“At the same time, MMR regulations have performed a health check on their finances, ensuring they will be able to withstand a future base rate rise. Lenders have increased the range of higher LTV options available to borrowers, allowing the average first-time buyer deposit to fall even as purchase prices increase.

“But the sands are shifting in the first-time buyer market. Loan-to-income caps announced in June have added further restrictions for lenders to factor in, on top of the tranche of regulations implemented in April. The effect is that lending is tied to wages much more tightly than in the past. Borrowers increasingly have to prove their financial resilience to access the higher LTV deals available. There is more lending, but at the same time it is more responsible and sustainable.”

Courtesy of Financial Adviser

Posted on October 30, 2014 by Peter Marriott, in: Industry posts

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