News story

Help to Buy: helping nearly 120,000 buy a new home

Help to Buy, has helped nearly 120,000 people achieve their aspiration of buying a new home since it was created, latest figures reveal.

Since the launch of the Help to Buy equity loan and mortgage guarantee schemes:

  • 80% of scheme completions have been made by first-time buyers, with more expected when the government’s Help to Buy ISA launches in December
  • average house price was £186,000, significantly below the national average
  • over 110,000 people have bought a home through the scheme
  • 95% of Help to Buy completions took place outside of London
  • half of Help to Buy completions have been for new-build homes

Help to Buy was created in 2013 to ensure that working people who were doing the right thing and saving for a deposit could achieve their aspiration of buying their own home through government support. Home ownership is a key part of the government’s long term plan to provide economic security for working people across the UK.

Together with the government’s Help to Buy: NewBuy scheme – which offered 95% mortgages for those buying new-build properties – the number of new home owners has reached over 118,000.

The scheme also continues to benefit first-time buyers overwhelmingly, with the vast majority of sales outside of London and at prices well below the national average.

Help to Buy is also ensuring the long-term health of the housing market by increasing housing supply, stimulating home building. Half of the homes bought through Help to Buy are new-build properties, helping to contribute to the 36% rise in private house building since the launch of Help to Buy.

First-time buyers

As today’s statistics show, Help to Buy is helping people who need it most, with over 90,000 households having bought their first home thanks to the scheme.

This is 80% of overall Help to Buy buyers, demonstrating that the scheme is successfully targeting those who need help getting on the housing ladder, despite only accounting for a small proportion of the mortgage market (3% for both mortgage guarantee and equity loan).

First time buyers will have a further boost from the Help to Buy ISA, which banks and building societies across the UK will offer from 1 December. Under this scheme, first time buyers can save up to £200 a month towards their first home and the government will boost their savings by 25%, or £50 for every £200, up to a £3,000 bonus. 6 major lenders have already signed up to offer Help to Buy: ISAs on 1 December. These lenders are: Barclays, Lloyds Bank, Nationwide, Natwest, Santander and Virgin Money.

Helping people across the UK

Help to Buy is helping people throughout the UK achieve their dream of owning a new or bigger home.
With almost all completions outside London, the highest number of homes have been through the mortgage guarantee scheme in the North West region. The equity loan – a scheme for new build properties – is particularly high in the South East region.

Figures for the mortgage guarantee scheme also show completions have been least concentrated in regions where house price growth is highest. In London the scheme makes up just 1% of all mortgage lending compared to an average of 3% across the country.

Getting Britain building

Help to Buy is also supporting the country’s economy by getting Britain building again. Half of homes bought under the scheme were new-build properties, contributing to the sharpest rise in house building orders since 2003.
Both annual housing starts and planning approvals are at a seven year high, with more than 606,000 new homes being built since 2010.

Responsible lending

Help to Buy was designed to support responsible lending.

This is demonstrated by today’s figures: the average house price for both parts of the scheme, at £186,000 (£155,000 for the mortgage guarantee and £216,000 for the equity loan scheme), remains significantly below the national average house price of £277,000.

The average house price to income multiple under the mortgage guarantee scheme is just over 3.5x salary, and capped at a 4.5x ratio to ensure responsible lending.

Chancellor of the Exchequer George Osborne said:

This government is committed to helping people achieve the aspiration of buying their own home, and our Help to Buy schemes have now helped nearly 120,000 working people across the UK do just that.

The stronger economy and financial system means we expect banks to start to exit our Help to Buy Mortgage scheme, and it was introduced in times of financial distress and will come to an end next year in any case.

The Help to Buy shared equity scheme goes from strength to strength and our new Help to Buy ISA we’re launching in December will provide generous support to those saving for their first home by providing a government boost on their deposit.

Supporting people who want to work hard, save and buy their own home is a key part of our long term plan to provide economic security for working people at every stage of their life, across the UK. Help to Buy is also boosting the nation’s economic security by driving an increase in house building in Britain, ensuring long-term housing supply and creating jobs.

Communities Secretary Greg Clark said:

As a One Nation Government we’re determined to ensure that anyone who works hard and wants to own their own home has the opportunity to do so.

Today’s figures show that, in less than three years, Help to Buy has already meant that nearly 120,000 people have been able to buy a home with a fraction of the deposit they would normally require.

On top of that, it’s getting Britain building again, with private housebuilding up by more than a third since the launch of the scheme.

Home Builders Federation Executive Chairman Stewart Baseley said:

Help to Buy continues to drive demand for new build homes. Its success is allowing builders to increase the number of homes being built and provide much needed, high quality housing. Delivering much needed homes also creates jobs, boosts local economies, and provides improved infrastructure and amenities for new and existing communities.

Image by seier+seier on Flickr. Used under creative commons.