Help to Buy

Is the Help to Buy mortgage guarantee "already delivering"

The Government recently released its first official figures on the new Help to Buy mortgage guarantee scheme which it launched at the beginning of October, saying that it is “already delivering”.

In the 4 weeks since it was launched, a total of 2,384 homebuyers have put in offers under the scheme with 10 having already completed.

The new mortgage guarantee scheme is available across the UK and can help people buy a new home with a deposit of as little as 5%.

The Government says the figures demonstrate that the mortgage guarantee scheme “is supporting responsible lending”. It highlights that on average, applicants are looking to borrow around £155,000 for houses worth about £163,000 which is below the national average house price (the latest UK average house price according to the Land Registry is £167,063).

The update also stresses that most applicants are first-time buyers, young and have a roughly average household income. Following concerns about rising house prices, the Government is clearly keen to show with these figures that the scheme is attracting the kind of buyers it was intended to help, i.e. typical first time buyers who would otherwise struggle to buy a new home.

RBS (and its Natwest brand), one of the two lenders currently offering mortgage deals via the scheme, released its own figures, which showed that it has received 1,075 applications. The majority are couples applying for an average mortgage of £159,000 to buy a home worth an average of £167,565, based on a joint salary of less than £50,000.

The lender said that first time buyers comprise 73% of applicants, 78% are aged 34 or under and the majority have just one child or no children at all.

Halifax, the other lender currently participating in the scheme (and Bank of Scotland, both part of Lloyds Banking Group), has not yet released its own figures but the overall number suggests that take up is broadly similar across the two.

To put these figures in some sort of context, the Bank of England’s latest lending statistics showed that there were a total of 66,735 mortgage approvals for house purchase in September.

The Government also said that its Help to Buy equity loan scheme, launched in March this year, has had an impact on house building with over 15,000 reservations for newly built homes.

So if you’re buying a new home - whether you have a deposit of 5% or 50% or you just need further information on help to buy - call the Guild of Professional Estate Agents Mortgage Service on 0844 8588 006.