Helping first-time buyers onto the housing ladder

New 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.

Out of a total of 48,393 Help to Buy completions to date, 82% have been made by first-time buyers.

This demonstrates that while Help to Buy continues to account for only a small percentage of overall mortgage transactions (2.5% for mortgage guarantee), the scheme successfully targets those who need a helping hand to get on the housing ladder.

Help to Buy also continues to support responsible lending: the average house price for both parts of the scheme, at £187,800 (£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.

The Chancellor has been clear that responsible lending is a core aspect of Help to Buy. On 26 June he announced that new mortgage guarantee loans would be restricted to 4.5 times borrowers’ income, in line with the introduction of a loan-to-income limit on mortgage lending by the Bank of England. This introduced a further safeguard to ensure that the mortgage guarantee scheme continues to support responsible lending.

Continuing the trends that started to emerge in previous Help to Buy figures, today’s official statistics show that the scheme is benefiting every region of the country.

While Help to Buy completions have been least concentrated in areas where house price growth has been highest, the highest number of mortgage guarantee scheme completions has been in the North West, and the highest number of equity loan scheme sales has been in the South East.

Overall, 94% of the total 48,393 completions under the scheme have been made by households outside of London.

The equity loan scheme in particular is also helping to drive an increase in the number of homes that are being built in the UK.

At the same time the construction sector has been growing for 15 consecutive months, and is currently experiencing the sharpest rise in house building orders since 2003, while companies are taking on new workers at the fastest rate since 1997.

These statistics follow recent positive indications about the UK housing market. Mortgage approvals grew by 14% in the year to June, with total property transactions growing by the same amount. Last year successful applications for major housing schemes were up by 23%, and planning permissions were granted for 216,000 new homes.

New housing starts have begun to respond, growing by 20% in the year to Q2 2014.

The Chancellor said: "It’s helping first time buyers onto the housing ladder.It’s a key part of our long term economic plan, which is supporting hard working people to secure a better future for their families.

"Importantly, Help to Buy is also driving a big increase in house building in Britain, boosting the construction industry and increasing housing supply."