Thousands of first time buyers have been helped to get a foot on the housing ladder through the government’s Help to Buy initiative, according to new figures.
Data published this summer revealed that more than 32,500 purchasers have bought new build homes through Help to Buy equity loans – of up to 20 per cent of the property value – and NewBuy options, with a further 7,300 sales supported by the Help to Buy mortgage guarantee for new build and older homes. More than 80 per cent of sales have involved first time buyers.
Meanwhile, a recent monthly update from the Council of Mortgage Lenders (CML) showed that the rate of increase in lending to first time buyers is outstripping that for other purchasers.
The figures, released in August, showed there were 28,600 first-time buyer loans issued in June, up by seven per cent on May and by 19 per cent on the same month last year. In contrast, although there were 31,900 loans to home movers, the increase on May was only four per cent and 11 per cent on June 2013.
Paul Smee, director general of the CML, said that the impact of tougher affordability checks by lenders on mortgage applicants – introduced as a result of the Mortgage Market Review (MMR) implemented earlier this year – was not hitting borrowers as hard as had been feared.
He said: “We now feel confident that, as we would hope, the MMR effect is more gentle dampener than hard brake.”
Help to Buy equity loans are available to first time buyers and home movers with a deposit of at least five per cent of the value of new build homes with a purchase price of up to £600,000. Mortgage guarantees of up to 15 per cent are available on new build and older homes worth up to £600,000, where the buyer is contributing at least five per cent of the property price as a deposit.
Clare Butcher, an associate solicitor at Palmers specialising in residential property, said: “Help to Buy is good news for first time buyers who want to get on the property ladder or people who want to move home but cannot raise the high deposits often required by lenders. At Palmers, we’re experienced in helping people take advantage of Help to Buy and earlier home buying support schemes. We are therefore ideally placed to assist first time buyers and home movers through the process.”
For more information, please contact our Property team on 01268 240000.