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Britain's Got Help to Buy Scheme - The Results Show

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help to buy scheme resultsThe final of Britain’s Got Talent is just over a week away but the results of the Government’s Help to Buy Scheme are just in.

The Government’s Help to Buy ‘mortgage guarantee’ scheme which was launched in October 2013 has so far has helped 7,313 properties to be purchased in Britain.

The ‘Equity Loan’ option, launched in April 2013, has assisted so far in 20,548 purchases, 80% of which were for first time buyers.

David Cameron  the Prime Minister said the figures had “proved the scheme has helped fix a market failure that was blocking those without large deposits from the property ladder.”

According to Ernst & Young the Accountants the impact of the scheme was “distinctly underwhelming” due to the scheme helping a mere 1.2% of total house sales between October 2013 and March 2014.

Only 5% of purchases under the Help to Buy scheme were in London, which is where the greatest house price increase has occurred.

Robert Bryant-Pearson, CEO of Allied Surveyors one of countries largest independent valuers for mortgage lenders stated “Help to Buy can hardly be blamed for the recent hike in property prices. Many parts of the UK have seen no real increase in property values in the last year but the double-digit increases in London property values have been caused by overseas buyers especially from Russia and Ukraine in the last few months. 60% of purchases in central London are for cash, with no mortgage borrowing: in these circumstances, there is little the Bank of England or the government can do to stem these price rises.​"

What are the options for Help to Buy?  

  1. Equity loans:

Equity loans are open to both first-time buyers and home movers on new-build homes in England with a purchase price up to £600,000.

You won’t be able to sub-let your home if you use this scheme. It must also be your only property.

  • you’ll need to contribute at least 5% of the property price as a deposit
  • the government will give you a loan for up to 20% of the price
  • you’ll need a mortgage of up to 75% to cover the rest
  1. Mortgage guarantees:

Mortgage guarantees helps you buy a home with a deposit of 5% of the purchase price. It’s open to both first-time buyers and home movers for new-build and older homes in the UK with a purchase price up to £600,000

To qualify for a mortgage guarantee, the home you want to buy must:

  • have a purchase price of £600,000 or less
  • not be a shared ownership or shared equity purchase
  • not be a second home
  • not be rented out after you buy it

The property doesn’t have to be newly built.

How long will the Help to Buy Scheme last?

The scheme is a temporary measure and is due to close in 2016.

The Bank of England has mentioned the scheme recently as part of its observations on the Housing Market. There are murmurings that the Bank of England would be more comfortable with a scaling back of the scheme from £600,000 to £300,000.

For the moment the scheme continues, and so long as you have a 5% deposit and the house isn’t over £600,000 you can apply to the scheme.

More news on that in September when they have their annual review… and we will be right in the middle of the X Factor

If you are thinking of moving this year and would like help with budgeting for your legal and other fees please use our free Online Conveyancing Calculator below

Paul Hajek