Around 1,000 household per week have got onto the property ladder thanks to the Help to Buy Equity Loan scheme, new statistics have revealed
Data released today revealed just over 52,000 home purchases were completed in 2018 under the scheme, which provides a loan to enable people to put down a deposit to buy new build property.
This is the equivalent of 1,000 homes each week, or 143 per day, and highlights the success of the scheme which has helped secure the purchase of nearly 211,000 properties since its launch in April 2013.
The majority of the these purchases last year – 42,000 – were made by first-time buyers, according to Ministry of Housing, Communities and Local Government (MHCLG).
Indeed, the scheme which is due to end in 2023, will now only be open to first-time buyers for the remaining for years it has to run.
Kate Davies, executive director of Intermediary Mortgage Lenders Association (IMLA) said the Government’s programme had continued to stimulate the bottom of the housing ladder and indirectly support the whole of the UK property sector throughout 2018.
She added: “With as many as one in every seven first-time buyers using Help to Buy in England in 2018, it is likely that the programme will remain invaluable in supporting home buyers over the remaining years of scheme, and will play a crucial role in helping to keep the housing market on an even keel during a period of heightened uncertainty as a result of Brexit.”
Stamp duty
The scheme is one of a number of measures the Government introduced to help first-time buyers and to stimulate the housing market.
It now also offers tax breaks for those buying their first home. This means first-time buyers purchasing a property worth £300,000 or less pay no stamp duty and those buying a home worth up to £500,000 are charged a reduce rate.
In the first three months of this year 46,800 first-time buyers were able to benefit from the tax relief, with 288,000 claims being made since the introduction November 2017, making combined savings of £680 million as a result.
According to analysis by Laura Suter, personal finance analyst at investment platform AJ Bell, the average first-time buyer saved around £2,360 in stamp duty compared to the maximum saving of £5,000.
“This has certainly boosted some onto the property ladder sooner than they would have been able to previously,” said Suter.
She explained this tax break could be used alongside schemes like Help to Buy as well as the Lifetime ISA, a savings plan for first-time buyers which benefits from a £1,000 a year Government bonus, and shared ownership as an additional boost.
“All these measures are making it easier for younger people to buy a property for the first time,” she said.
However, it doesn’t detract from the fact that you still need an eye-wateringly large deposit and a sizeable salary to be able to buy in certain areas of the UK, which proves too high a hurdle for many young people.”
Article by Kate Saines for www.whatmortgage.co.uk