Over 290,000 are now homeowners due to the Help to Buy scheme
The Help to Buy scheme was introduced by the government with the aim of helping first-time buyers get onto the property ladder; designed mainly to overcome the barrier of people not being able to save a large enough deposit to qualify them for a mortgage loan.
Help to Buy allows buyers to purchase a new build home with just a 5% deposit, it is then topped up by the government with a 20% equity loan that is interest-free for five years.
The number of homes bought using the scheme has increased year-on-year, with over 290,000 buyers having benefitted since it first launched.
Who has benefited from Help to Buy?
Benefiting the most from the government’s scheme has been first-time buyers, accounting for 82% of all purchases.
The average price of a property bought using the scheme is £279,995, with a typical household income of £53,218.
From April 1st, a new scheme has been launched that is only available exclusively to first-time buyers. As a result, regional price caps will be introduced on the value of properties that are purchased using the scheme.
These caps range from £186,100 in the North East to £437,600 in the South East and £600,000 in London. Below is a full list of the regional price caps for Help to Buy.
Help to Buy price cap
Yorkshire and the Humber
East of England
Buyers in London
For most of the country, the equity loan is capped at 20% of the property’s value.
However, in London, buyers can apply for an equity loan worth up to 40% of their property’s value.
Whilst those who already own a home or have previously done so have also benefited from Help to Buy, these have only accounted for around 18% of all purchases made using the scheme, with the typical home they bought much more expensive compared to first-time buyers.
It is important to remember that the Help to Buy scheme must only be used on your main residence and cannot be used to buy a second home or a buy-to-let property.
For key information on the 2013-2021 and 2021-2023 schemes, we’d advise referring to: gov.uk/government/publications/help-to-buy-equity-loan-buyers-guide
To start your property journey with us, please contact our team today.
This article was originally published by BriefYourMarket and is reproduced here with their permission.
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