Home » News & Insight » Property » How Help to Buy Has Created Almost Half a Million New Homeowners

How Help to Buy Has Created Almost Half a Million New Homeowners

The government’s Help to Buy schemes have assisted over 400,000 first-time buyers in obtaining their very first home. HM Treasury figures have recently shown that over 494,108 property purchases have been made thanks to Help to Buy Schemes over the past 6 years and around 430,000 of those purchases were from first-time homeowners. Properties bought under Help to Buy schemes average around £200,000 in value.

new build homes apartment block in the UK

Over £10 Billion in Help to Buy Equity Loans

Over £10 billion has been lent to buyers via Help to Buy equity loans which are open to both first-time buyers and home movers. This figure was calculated for the months between April 2013 and September 2018. Around £8.45 billion was lent to only first-time buyers under the Help to Buy scheme.

Buyers which utilise the equity loan scheme must provide a 5% deposit or else they are not eligible for the scheme. It applies only to newly-built homes up to a maximum of £600,000 in value. The government will then lend another 20% of the property price to assist new home buyers. However, if you live in London then you can borrow up to 40% of the purchase price. For the first five years, the loan is interest-free as long as you have at least a 5% deposit and then there is an additional 1.75% interest charge which rises each year, plus an additional 1%. The loan must be repaid when the mortgage is paid off or if the property is sold.

The current Help to Buy equity scheme is set to end in March 2021 but will be replaced by a new scheme which will run until March 2023 and is only open to first-time buyers. The newer scheme will work similarly to the current one with the exception that the maximum value of the property will be subject to regional caps instead of a nationwide cap of £600,000.

Help to Buy ISAs Assist in the Purchase of Nearly 200,000 Properties

Since launching in December 2015, around 1.4 million Help to Buy ISAs have been opened by first-time buyers. This has lead to over 194,379 property completions that have been supported by the scheme with the majority of property completions being made in the North West and Yorkshire and the Humber.

Help to Buy ISAs are designed to help first-time buyers save for a deposit and accounts can be opened with a maximum deposit of £1,200. After that, the monthly contribution is £200. Monthly contributions cannot be increased and will stay at £200. When the property is purchased, the government will increase any contributions by 25% with a maximum bonus claim of £3,000. These Help to Buy ISAs are only available to new savers until the end of November 2019 but existing account holders can continue saving into their account until 30 November 2029.

Think Plutus

Become a Client

Mortgages. Think Plutus.