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.