Help to Buy scheme funded over 4,000 completions in June

Well in excess of 4,000 households in England used the Government's Help to Buy loan scheme to purchase properties in June, the highest monthly total since the initiative was introduced last year.

The latest Government data indicated that there were more than 4,300 completions during the month, with over 27,100 homes having now been acquired using the scheme. The figures refer to the first phase of Help to Buy, which offers buyers an interest-free loan worth up to 20 per cent of the price of a new build home.

The latest figures from the Department for Communities and Local Government (DCLG) revealed that around £1.1 billion of loans had been offered, supporting purchases worth £5.65 billion. More than two-thirds of buyers took the chance to take out a 95 per cent mortgage, with the rest putting down larger deposits.

Almost a third of sales were in the £150,001 to £200,000 price bracket, while a quarter involved homes costing less. A fifth were in the £200,001 and £250,000 bracket. The average value of properties acquired through the scheme was £187,000.

 Loans are available on homes costing up to £600,000 and there is no upper limit on applicants’ incomes.

The scheme, which was introduced in April 2013 to help kick-start construction by helping buyers with small deposits, has successfully achieved its goal, according to the Housing Minister, Brandon Lewis.

“It’s no accident that since the start of the scheme private housebuilding has shot up by a third and continues to climb. Developers are increasing their output, and taking on new workers at the fastest rate since records began,” he said.

But the data released by DCLG indicated that Help to Buy is not a major contributor to the booming housing market, with less than 250 households, or 0.9 per cent of the Help to Buy total, having used the initiative to purchase properties costing more than £500,000 while 3 per cent of the total had household incomes in excess of £100,000 a year. Just over eight out of 10 purchases were made by first-time buyers.

Together with the second part of Help to Buy – the mortgage guarantee that applies to all homes worth up to £600,000 and not just new builds – and the older New Buy scheme, the Government had helped almost 40,000 households to purchase homes, according to Lewis.

He added, “Today, for the first time, we’re publishing postcode level data about the scheme, so communities can see exactly how this vital part of our long-term economic plan is improving the housing market and helping their area.”

Stewart Baseley, Executive Chairman of the Home Builders Federation, said Help to Buy is allowing people across the county to buy new build homes enabling developers to build more properties.

“Indicators suggest increases in house building activity in the region of 25% and the past year has seen the steepest increase in new housing starts for around 40 years,” said Baseley. “The industry has recruited thousands of people in recent months and is working with its supply chain to ensure the capacity is there to sustain increases – all of which is giving the country a huge economic boost.”

But Baseley insisted that the central and local Government needed to make sure that the planning system supported future demand for homes, to ensure that the increases in housebuilding levels are sustainable.