Help to Buy first-time buyer use increases by 16%

By Gary Adams

Go to the profile of Mortgage Strategy
Nov 30, 2018
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Data released by the ministry of housing, communities & local government reveal that, since launch on 1 April 2013 to 30 June 2018, 183,947 properties have been bought using the Help to Buy equity loan scheme, with first-time buyers making up 81 per cent of this.

Under the programme, in the year to 30 June 2018, 49,264 homes were bought – 40,162 of these being purchased by first-time buyers – making for an annual increase of 16 per cent.

Focusing on the capital, there were 4,878 completions in the year ending 30 June, an annual increase of 34 per cent. Of these, 4,627 purchases were by FTBs, a rise of 32 per cent.

In total, the value of properties sold under the initiative now stands at £46.5bn, with the value of equity loans at completion coming in at £9.9bn.

Imla executive director Kate Davies says: “These statistics underline that there is considerable appetite for HTB among homebuyers. The government’s programme continues to stimulate the bottom of the housing ladder and indirectly support the whole of the UK property sector.

“[This year] looks set to be the strongest year so far for HTB sales, with total completions since the scheme began likely to have passed the 200,000 mark at the start of this quarter. This further highlights that HTB will remain invaluable in supporting home buyers into the next decade and will play a crucial role in helping to keep the housing market on an even keel during a period of heightened uncertainty as a result of Brexit.”

James Pendleton founder and director Lucy Pendleton adds: “Those looking for some clues as to what is propping up house prices across the country need look no further. FTBs are piling into HTB and they don’t seem to give two hoots about the Brexit uncertainty that is holding back the rest of the market.

“It’s here [in London] they are putting the scheme to particularly good use because house prices are still relatively high despite the fact they are cooling. That’s not that surprising, but the scale of the increase certainly is.”

Legal & General Mortgage Club head of broker relationships and propositions Craig Hall comments: “With its largest quarter to date today’s figures show the vital role HTB continues to play in the market. Not only has the scheme enabled builders to deliver more homes, with an increased supply of 78 per cent in the last five years, but it is consistently supporting the buyers who need it most.”

“Given the quarter on quarter increases we have been seeing, it is likely we have reached the 200,000 mark by now. It’s good news that the scheme has now been extended beyond 2021, however, we still need to look at what will happen post 2023.

Intrinsic managing director Gemma Harle is keen to point out the impact HTB is having on the type of stock: “The problem is the scheme hasn’t actually increased the amount of property being built but rather changed the type of property being built.

“For example, it is rare to see new build bungalows anywhere in the market anymore. Therefore, the focus might be better placed on building more new housing stock which appeals to a second or third time buyer or incentivising this group to move up the property ladder in other ways so that more stock lower down the chain is freed up creating a more buoyant market.”

Earlier this week, Nationwide called for the extension of the HTB Isa, the deadline for application for which ends in late 2019.

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