Official figures published today reveal that over the period since the launch of the Help to Buy: Equity Loan scheme (1 April 2013 to 30 June 2018), 183,947 properties were bought with an equity loan.
The total value of these equity loans was £9.90 billion, with the value of the properties sold under the scheme totalling £46.52 billion.
Most of the home purchases in the Help to Buy: Equity Loan scheme were made by First Time Buyers, accounting for 148,863 (81%) of total purchases.
The mean purchase price of a property bought under the scheme was £252,888, with buyers using a mean equity loan of £53,793.
In London, the maximum equity loan was increased from 20% to 40% from February 2016, and since then to 30 June 2018, there were 9,470 completions in London, of which 7,885 were made with an equity loan higher than 20%.
Shaun Church, director at Private Finance, said: “The Help to Buy scheme has undoubtedly been a much-needed helping hand for many first-time buyers struggling with high housing costs.
“Approvals have continued to grow year-on-year, suggesting there is still strong demand for options onto the housing ladder which don’t require a hefty deposit.
“Londoners have strongly benefited from the maximum equity loan doubling in size, with 83% of all completions using the scheme in the capital being made with a loan of more than 20% in Q2. This is some compensation for the fact that Londoners do not stand to benefit as much from recent cuts to stamp duty for first-time buyers, given only properties under £300,000 are fully exempt.
“Though Help to Buy is a valuable route to homeownership, where possible it is best to exit the scheme once the five-year interest-free grace period is over or sooner if this is viable. As Help to Buy caters to a more niche market, the rates available on more traditional mortgage products are generally more competitive.
“Help to Buy borrowers are also expected to pay 10-20% back of the current value of their home rather than the original equity loan, so exiting the scheme enables them to enjoy more of the capital gains from their property should their home rise in value.”
