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Government spends £13.46 billion on Help to Buy 28/11/2019 Labelled as Scrutiny, Finance, Legislation

Latest figures show that in the period between 1 April 2013 and 30 June 2019, 236,313 properties were bought with the help of the Government's Help to Buy Equity Loan and the value of those loans was £13.46 billion, with the value of properties sold under the Scheme totalling £62.04 billion.


With a Help to Buy Equity Loan the Government lends up to 20% of the cost of a newly built home, the purchaser finds a 5% cash deposit and a 75% mortgage to make up the rest. In London, the maximum equity loan was increased from a maximum of 20% to 40% from February 2016.


A Help to Buy Equity Loan is a Government financial subsidy provided to eligible applicants to purchase eligible homes through a Government equity mortgage secured on the home. The purchaser receives a public subsidy in that they are not charged loan fees on the Help to Buy Equity Loan for the first five years of owning the home.


The Help to Buy Equity Loan Scheme can be used to purchase new build properties up to the value of £600,000 with a maximum equity loan of £120,000 (20%). In Greater London the maximum equity loan is £240,000 (40%).


192,212 (81%) of the home purchases were made by first time buyers using a total of £10.78billion Equity Loans.


The average (mean) purchase price of a property bought under the Scheme was £262,522 with a mean equity loan of £56,951. Only just over a third (36%) of Help to Buy loans completed were for homes under £200,000.


56% of first-time buyers using the Scheme to purchase a property had household incomes ranging between £20,000 and £50,000. However, of the 236,313 cumulative completions to 30 June 2019, 67,102 purchasers (28%) had total household incomes of greater than £60,000 and 10,371 purchasers benefitting from the public subsidy of an interest free loan had incomes in excess of £100,000.


Read the full statistical release

The existing Scheme has been criticised in some quarters amid concerns that it fuels new build house price increases and is poorly targeted being open as it is to existing home buyers and purchasers on relatively high incomes. 


ARCH has long argued that any Help to Buy Scheme should be restricted to first-time buyers on lower incomes who are unable to access the owner-occupied market and that the Government should at least match the investment in Help to Buy by investing equivalent amounts in the supply of new social rented housing. 

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