UK help to buy schemes continue to benefit first time buyers, latest data shows

The UK’s flagship housing schemes aimed at boosting the property market continue to flourish with first time buyers benefitting the most, the latest published data shows.

In the first two years of the Help to Buy Equity Loan scheme to the end of March 2015, some 47,018 properties were bought with the total value of these equity loans at £1.99 billion and the value of the properties sold under the scheme totalling £10.01 billion.

The mean purchase price of a property bought under the scheme was £212,932, compared with a mean equity loan of £42,394 and some 82% of the homes were bought by first time buyers.

Figures for the Help to Buy NewBuy scheme saw 17 home purchases were made in the first quarter of the year, bringing the total number of house purchases up to 5,706 since the launch of the scheme in March 2012.

The Help to Buy Equity Loan scheme can be used to purchase a new build property up to the value of £600,000, with a maximum equity loan of £120,000. The numbers of homes purchased in the scheme to the end of March were greatest in the £150,001 to £200,000 price bracket, representing 30.9%.

The data also shows that of total sales some 22.1% were for properties between £200,001 and £250,000. These two price brackets combined therefore accounted for over half of the total completions in the scheme.

The median purchase price for all purchases in the scheme was £191,000 with the majority of sales are bunched in the lower price brackets. The mean equity loan was slightly higher at £42,394, and 19.9% of the mean purchase price. This reflects that the majority of completions in the scheme used the full 20% equity loan available.

The most frequent type of property sold under the scheme were terraced houses, representing 29% of total completions, followed closely by semi-detached properties at 28.7%. Detached properties and flats made up 26.4% and 15.9% of completions respectively.

The numbers of homes purchased in the scheme to date in terms of total applicant household income were greatest for purchasers with a household income between £30,001 and £40,000 a year, representing 25.2% of total completions.

Some 17.8% of completions had applicants with a registered household income of between £20,001 and £30,000 a year, with 3.2% of completions with applicant household incomes lower than this. Some 80.3% of completions had applicant incomes of £60,000 or less, whilst 3% of completions had applicants with a registered household income in excess of £100,000 a year.

The quarterly figures for the NewBuy Guarantee scheme are based on legal completion dates for transactions in the scheme as reported by participating mortgage lenders. This covers England only and shows data from the launch of the scheme on 12 March 2012 to 31 March 2015.

The total value of the Government Guarantees for these completed sales was £59.5 million. To date, there have been no claims made with respect to the guarantees made under the scheme.