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Average cost of homes bought with HTB hits nearly £300,000

Home-Houses-Different-Mortgage-Rent-700.jpgThe average purchase price of a home bought using a Help to Buy equity loan reached nearly £300,000 in Autumn last year, outpacing the rise in UK house prices.

New government figures on uptake of the Help to Buy equity loan scheme show that the mean price of a home bought through the scheme in the third quarter of 2018 was £298,926, up by nearly 6 per cent from £285,495 in the same period of 2017.

Meanwhile, according to Office for National Statistics figures the average house price rose by 3 per cent to £249,408 in the year to September 2018,

The number of homes bought using a Help to Buy equity loan rose by 13 per cent from 44,547 to 50,302 in the year to the end of September, compared to the previous 12 months

Of these purchases, nearly 82 per cent were made by first-time buyers, up slightly from 81 per cent last year.

The latest year’s figures bring the total number of homes bought through the scheme to 195,219 since its launch in April 2013.

The total value of these equity loans was £10.66bn, with the value of the properties sold under the scheme reaching a total of £49.89bn.

In London, the maximum equity loan was increased from 20 per cent to 40 cent from February 2016, and since then to 30 September 2018, there were 10,829 completions in London, of which 9,091 were made with an equity loan higher than 20 per cent.

Intermediary Mortgage Lenders Association executive director Kate Davies says: “These statistics show that Help to Buy has become a cornerstone of the UK property market.

“The government’s programme continues to stimulate the bottom of the housing ladder, providing essential support to the whole of the UK property sector.”

She adds: “These figures show a continuing trend in what looks set to be the strongest year so far for HTB sales, with total completions since the scheme began likely to have passed the 200,000 mark by the end of 2018, with around 1,000 sales a week completing with the support of HTB in 2018.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Something’s too expensive so do we:

    A. Make it easier to buy using more debt

    B. Make it easier to buy using tax payers money

    C. Do both and wonder why its now more expensive to buy than it was before A and B happened.

    “The government’s programme continues to stimulate the bottom of the housing ladder, providing essential support to the whole of the UK property sector.” …or, it continues to push up already expensive house prices.

    It’s not supporting it, its fuelling a potential bubble.

  2. It is no coincidence that the biggest house builder who is also the biggest provider of HTB has just made £1 billion profit.

  3. Another thicko in the government/civil service dreams up a quick fix that defies the laws of economics and it ends up getting gamed (cf all other examples of QE)and widening rather than narrowing the problem it was meant to fix.

    The problem was (supposedly) the reinstatement of the need for a sensible deposit by setting LTVs to 75%. This meant that come 2010 there was no pipeline left of FTBs with sufficient deposit, so the new build market was confined to those few FTBs with a bit of a spine and who had saved, and those with access to Bank of M&D.

    The problem was the getting the deposit bit and not the servicing of the mortgage bit. The solution of giving them a HTB deposit loan should have been accompanied by a cap on the total lending (HTB and mortgage) (eg if max mortgage was 3x, then he total could be capped at, say, 4x).

    This mess up is going to entrap youngsters (especially in London with the 40% max HTB loan) in decaying leaseholds with rising service charges for years to come or face large losses. Will the government take the rap? It doens’t look like it – they are already lining up Persimmon to take the fall on their behalf. Who will pay the PPI style claims on this one? I suspect housebuilders to a degree.

    Time to review the old share portfolio methinks and cross another sector off the list of acceptable ones.

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