Official figures from the Treasury show that it is helping those it intended to with 82% of total sales going to first time buyers. The data also shows that the average purchase price was £187,800.
This shows that fears it would be dominated by existing buyers and those buying larger homes were unfounded. The data also shows that London has not dominated either.
Indeed the top six local authorities in terms of legal completions were Wiltshire, Leeds, Central Bedfordshire, Peterborough, Milton Keynes and Bedford and 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,’ said George Osborne, Chancellor of the Exchequer.
‘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,’ he added.
He also pointed out that the average house price for both parts of the scheme, at £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.
Paul Smee, director general of the Council of Mortgage Lenders, described the data as reassuring and confirms that Help to Buy is essentially delivering its intended objectives. 'The scheme is supporting new housing construction, and is being used extensively by first time buyers to purchase average priced properties in all parts of the UK,' he said.
However, Simon Crone, vice president of Mortgage Insurance Europe for Genworth, beleives that it is a major concern that wider access for first time buyers has relied on a temporary fix. 'We have only just begun to address the dual supply shortages of high loan to value (LTV) mortgages and new homes, and are still a long way from making major inroads into the backlog of frustrated, creditworthy buyers,' he said.
'Help to Buy proves that it is possible to offer prudent loans with affordable deposits and prompt higher rates of house-building. It must now become a platform to a permanent market-driven solution that sustains this progress and can support first time buyer access while maintaining financial stability,' he pointed out.
'The government, or its successor, cannot avoid the need for further action if it wants to bridge the widening social and economic divide in the property market and sustain the rise in new homes. The private mortgage insurance industry is willing and able to take the burden off taxpayers and work with government and regulators on a permanent framework of mortgage insurance and capital relief for lenders. A permanent heir for Help to Buy remains the missing piece of the UK’s regulatory jigsaw,' he added.
