The UK government's Help to Buy scheme has been taken up by nearly 20,000 people in England during the first 12 months. The scheme accounted for nearly one third of all new build home sales during this time.
In addition, it has accounted for 2.4% of property sales throughout England. Even though the scheme is controversial, figures in the article in Propertywire show it's not only beneficial for those purchasing property in London. Out of the 19,394 buyers using the equity loan scheme, 85% were first-time buyers. This shows quite clearly the pent-up demand from first-time buyers who were unable to raise a sufficiently large deposit to get onto the housing ladder. Approximately 60% of the loans provided under Help to Buy have been worth up to £200,000, highlighting the regional spread of the take-up of the scheme.
The median price for all loans given was £184,995. Regionally, the largest take-up of the equity loan scheme has been in the West Midlands, where it accounts for around 38% of all new build sales. This is nearly 3 times the amount seen in London where just 13% of buyers purchasing new build homes have used this equity loan.
The scheme has been criticized in the past as some feel it could be pushing up prices in London and the southeast, but figures from this report seem to show this isn't the case. It is likely to have boosted buyer confidence, and this is more likely to have had an effect on prices than the actual equity loan scheme itself.
So far, the government has extended approximately £791 million in loans under the Help to Buy Equity Loan scheme. While this might seem like a considerable sum of money, the numbers being helped are still far below expectations. The Chancellor George Osborne hoped the scheme would help 200,000 buyers.
Not surprisingly the scheme has also had an impact on the construction industry. There has been an increase in the number of planning applications over the past year from house builders and developers of all sizes.
Help to Buy encompasses three different schemes which are the equity loan, New Buy and the mortgage guarantee, but Help to Buy is often used to refer to the mortgage guarantee scheme. While it may have already helped many people purchase homes, not everyone is convinced it is a good thing. The OECD recently voiced its concerns, as have the three previous chancellors of the exchequer.