The average income of Help to Buy users is almost double that of the overall UK average, raising questions of who is benefiting from the Government’s flagship housing scheme.
Analysis of the Help to Buy equity loan scheme, which was released by the Treasury among its Budget documents last week, showed that the average annual household income of buyers using the initiative reached £52,881 at the end of last year.
This is up 19.1% since the Government’s previous analysis of the scheme in 2015.
In contrast, the average household income nationally is £27,300.
The majority of Help to Buy users (23%) had incomes of between £30,000 and £40,000, while just 16% had incomes below £30,000.
Another 15% had incomes under £60,000 and a further 15% under £80,000, while around 14% had incomes of between £80,000 and £100,000.
Agents have previously criticised the Help to Buy scheme for taking demand away from the second-hand market, but the report claims just 12% of users said they had initially sought second-hand properties.
The analysis credits the scheme with a 14.5% increase in the supply of homes and a 37% increase in demand as of the end of 2017.
The report concludes that there was no evidence of a “significant impact” on prices overall but said the scheme’s effect on overall demand has pushed up new-build prices, with the new-build premium at 17% as of the end of 2017.
It comes as the Government unveiled plans to replace the current Help to Buy equity loan scheme when it ends in April 2021 with a new two-year initiative aimed solely at first-time buyers.
The value of property that can be purchased will be capped based on regional property prices set at 1.5 times the current forecast regional average first-time buyer price, up to a maximum of £600,000 in London.
It will end in March 2023 and the document said the Government does not intend to introduce a further Help to Buy equity loan scheme.