Over 2,000 applicants approved in Help to Buy’s first month

11 Nov 13
Prime Minister David Cameron has said the government’s Help to Buy programme is helping a new generation onto the housing ladder after it was revealed more than 2,000 people have put in offers on homes using the scheme.

By Richard Johnstone | 11 November 2013

Prime Minister David Cameron has said the government’s Help to Buy programme is helping a new generation onto the housing ladder after it was revealed more than 2,000 people have put in offers on homes using the scheme.

Cameron announced today that 2,384 people have had decisions in principle to be provided with mortgages, worth a total of £365m, since Help to Buy was formally launched on October 7. Ten of the applications have already been completed.

The programme, which offers mortgage guarantees to people who are only able to raise a 5% deposit, is intended to help people who want to buy their first home or move into a bigger property. In total, it will provide backing for up to £130bn of mortgages over three years.

Critics have warned that the scheme could lead to a housing bubble by keeping property prices high, but Cameron said the details of loans revealed it was backing responsible lending. On average households have asked to borrow around £155,000 for houses worth about £163,000, which is below the UK average price of £247,000.

The banks providing the loans – which currently include Natwest, RBS, Halifax (part of the Lloyds Banking Group) and Bank of Scotland – have received applications from across the country. More than three-quarters have come from outside London and the southeast.

In addition, more than three-quarters of the applicants are first-time buyers, with many in their early thirties.

‘Four weeks in and it’s clear that Help to Buy is already delivering,’ Cameron said.

‘In just one month, over 2,000 people have been accepted for a Help to Buy mortgage. Or put another way, 75 families every single day have been put on the path to owning their dream home.

‘But the best thing about Help to Buy isn’t the statistics ­– it’s who is really benefiting. Most Help to Buy applicants are first-time buyers, young and have a roughly average household income. This is all about helping hardworking people get on the first rung of the property ladder – and helping them get on in life.’

According to the figures released by government today, applicants will face average monthly repayments of around £900 and have an annual household income of around £45,000. This means Help to Buy mortgage repayments will represent 24% of borrowers’ gross income, the same as the historical UK average calculated by the Council of Mortgage Lenders.

Ministers also highlighted that new housing starts are a third higher than at the same time last year and said it was clear housebuilding would form a critical part of the UK’s economic recovery.

 

Spacer

CIPFA logo

PF Jobsite logo

Did you enjoy this article?

AddToAny

Top