While recent press coverage related to the Help to Buy scheme has consistently linked inflated house prices to the Government scheme, newly released data confirms that the volume of properties purchased via this route has been minimal since it began in April 2013.
The figures show that as little as 4 per cent of all properties sold since October have been purchased with assistance from the government, with 7313 homes purchased via the mortgage guarantee variance of the scheme since October. The overall total of completed house purchases since the first iteration of the scheme was released last year comes to 636,100, and the overall figure for properties purchased using either of the Help to Buy scheme is 26,714.
The Council of Mortgage Lenders director general, Paul Smee, noted the news was quietly comforting for the market: “On the basis of these figures, the scheme appears to be successfully reaching its target group of creditworthy borrowers who would otherwise be unable to buy until they had accumulated a more significant deposit. Lenders are always mindful of what their customers can afford.
“Throughout the UK, the proportion of business accounted for by Help to Buy has, to date, been modest overall. Any worry that the scheme risks stoking a housing boom fortunately does not seem to be playing out in practice so far."
David Cameron took the opportunity on a visit to a Derbyshire construction site to proclaim that the much maligned initiative was having a more positive affect for the housing sector than many market commentators had hoped. He said: “As Britons, home ownership is in our blood – it's about aspiration, planning for the future and laying down roots.”
The shadow housing minister for Labour, Emma Reynolds, took the opportunity to state that the news does not necessarily mean the schemes have been an unequivocal success for all sections of the market. She said: "Any help for first-time buyers struggling to get on the property ladder is welcome. But rising demand for housing must be matched with rising supply if this scheme is to bring buying a home within the reach of low- and-middle-income earners.
“Help to Buy has helped thousands of hardworking people to buy a new home and crucially it is helping to increase the number of new homes being built around the country."
Mark McBurney of specialist broker, Contractor Mortgages Made Easy, said the figures provide a level of reassurance for any contractor looking to still take advantage of the scheme. He noted that, “many contractor friendly lenders have been offering funding via the scheme since it began, and continued to support it once the mortgage guarantee scheme was introduced.
“When the Office of National Statistics confirmed just over a week ago that rising house prices in the capital were continuing to escalate, many market commentators and the Bank of England warned that this could create a level of pressure required to pull the schemes earlier than expected. While they certainly have a shelf-life, this news will hopefully inspire confidence for the Governor of the Bank of England to stall any hasty moves to close the schemes.”
Article By: Simon Butler, Senior Mortgage Consultant at Contractor Mortgages Made Easy
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