Nearly £1bn of mortgages backed by Help to Buy

2 Jan 14
Home loans worth nearly £1bn have been backed by the government’s Help to Buy mortgage scheme in its first three months, Prime Minister David Cameron said today

By Richard Johnstone | 2 January 2014

Home loans worth nearly £1bn have been backed by the government’s Help to Buy mortgage scheme in its first three months, Prime Minister David Cameron said today.

Publishing the latest figures on the controversial scheme, Cameron said government mortgage guarantees had so far helped over 6,000 people put in offers to buy homes. Once these transactions are completed, around £1bn of lending to aspiring property owners will have been approved.

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.

Cameron said the support was helping those who had previously found the property market out-of-reach due to the large deposits required.

‘That is why as part of our long-term economic plan we introduced the Help to Buy scheme, so hardworking people with sufficient earnings can get on, fulfil their aspirations and enjoy the security of owning their own home,’ he added.

‘In less than 3 months, the scheme has already helped thousands of people. I want to see that continue in 2014 and for Help to Buy to help thousands more realise their dream of home ownership.’

Among the figures released today, it was revealed the average house price for Help to Buy mortgage support was £160,000, below the UK average house price of £247,000.

The majority of applications – around three-quarters – are from outside London and the southeast of England, the Treasury figures stated. In addition, more than 80% of those using the scheme were first time buyers.

The programme, which was announced by Chancellor George Osborne in his 2013 Budget, has been criticised for potentially contributing to an unsustainable increase in house prices in the south east.

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