New Government figures have revealed that 17,395 homes have been bought under the Help to Buy scheme.
Government figures have confirmed that more than 17,000 homes have so far been purchased through ithe Help to Buy scheme.
The controversial scheme, which allows buyers to get their hands on a property with a deposit of just 5%, has been criticised by some for helping to stoke the house price bubble. However David Cameron, the Prime Minister, has defended it as "a key part of our long-term economic plan".
How Help to Buy works
Help to Buy was launched last year, with a key target of making “the aspiration of home ownership a reality or more people across the country”.
There are actually two schemes under the Help to Buy umbrella. The first - Help to Buy: equity loan - sees the 5% deposit bumped up with a government-funded equity loan of up to 20% of the property's value. It's restricted to just new-build properties. The remaining 75% of the purchase price then comes from a normal mortgage.
Then there's the Help to Buy: mortgage guarantee scheme. This can be used for new build or existing homes. Again the buyer needs to provide at least 5% of the home’s value as a deposit, with the rest coming from a 95% mortgage. The Government acts as a guarantor on the mortgage, in an effort to encourage lenders to offer deals at such a high loan-to-value.
For more, read Help to Buy mortgages explained.
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Properties bought through the scheme
14,823 properties have been bought using Government equity loans, which launched in April last year and 2,572 with the mortgage guarantee scheme, which was launched back in October. A whopping 88% of property sales supported by the scheme were to first-time buyers.
[SPOTLIGHT]The South East racked up the highest number of sales (2,844) in England thanks to Help to Buy. The East, South West and North West regions each saw over 2,000 houses sold under the scheme.
The English region with the lowest number of sales was the North East (1,057), while London took the second lowest spot on the list with 1,095 sales. This news might help to relieve fears that the scheme would drastically increase house price inflation in the capital. Indeed, 77% of sales took place outside of London and the South East.
Help to Buy isn't just available in England. In Scotland, where the price cap for property prices is set at £400,000 (compared to £600,000 in England), there were 416 sales and in Wales, where the cap stands at £300,000, there were just 131 sales.
Northern Ireland, where only the mortgage guarantee is available and not the equity loan, saw a paltry 33 sales.
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The future of Help to Buy
The Chancellor George Osborne announced last week that Help to Buy: equity loans would be available until March 2020. They were previously to be withdrawn in 2016.
As this part of the programme is only available for new builds, he believes that it will result in the construction of 120,000 new homes, which will in turn help around 200,000 people in total.
What do you think of the Help to Buy scheme? Would you be tempted to use it in order to purchase a property? Let us know your thoughts in the comments box below.
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More on buying property:
Help to Buy mortgages explained
The best Help to Buy mortgages