The overwhelming majority of purchasers using the taxpayer-backed Help to Buy scheme are first-time buyers – and their average purchase price is above that of a home mover’s.
New government data has revealed that as of the end of the first quarter, first-time buyers made up 81% of completions.
The initiative provides a Government equity loan of up to 20% to boost a buyer’s 5% deposit on a new-build property.
The latest figures show out of 169,102 properties sold through the scheme, 136,657 have gone to first-time buyers.
New buyers have paid £290,277 on average compared with £249,708 on average for movers.
In London it is the reverse – where first-time buyers paid £401,354 on average and £457,799 for existing home owners.
First-time buyers made up 95% of 6,548 Help to Buy sales in the capital.
Most buyers (44%) had incomes of between £30,001 and £50,000 a year, while 32% had incomes between £50,001 and £80,000.
Another 10% had annual incomes above £80,000 per year.
Commenting on the figures, Craig Hall, new-build manager for Legal & General Mortgage Club, said: “Help to Buy has evidently become an important part of our housing market, consistently helping more than 80% of first-time buyers get on the property ladder and supporting growing families with moving up the ladder.
“While the scheme certainly eases the issues with affordability and a raising a large deposit, over recent years we have seen mortgage lenders improving their core new build offering, providing further choice and reducing the dependency on the scheme for many borrowers.
“It’s no secret that we need to build over 300,000 new homes a year to keep up with demand, and the Government will need to find a range of solutions in order to help meet this target.
“Whether it’s guaranteeing the scheme post-2021, increasing support for other affordable schemes such as shared ownership, or relaxing planning restrictions, we need new supply entering the market – stimulating growth and allowing it to better serve those who need it most.”
Ah yes one of the help to buy buyers in our area really needed this flawed government scheme.
Combined their income was £160,000 a year. What would they have done without it?!
Oh and has anyone managed to yet sell one of these help to buy properties for what the purchaser paid for them??… no evidence at all that with a guaranteed market all developers did was put their prices up!
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Poorly structured and presented headline.
Anyone reading that would reasonably think that the other two thirds have incomes of more than £80k.
Just saying…
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HTB is a terrible waste of taxpayers money, lining property developers pockets and should be scrapped immediately.
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Awesomeagent
If I may put forward something to chew on…
Imagine a developer (NOT London-based) sells 1000 homes in a year with the ‘help’ of HTB.
The average price of those properties is £200000.
HTB provides 20% Equity Loans (£40,000) on those 1000 properties. ‘Cost’ – £40million
That’s a lot of cash – and understandable why you say what you do.
HOWEVER… there’s the flip-side that I would ask you to look at.
It’s not a ‘cost’ – it’s an investment. And here’s how:
Imagine a developer can’t sell 1000 homes because the potential buyers can’t afford them.
Developer and associated subbies makes upwards of 2000 staff redundant. Cost to State (Benefits etc): £10million+ (conservative estimate)
Loss of income on Duties (VAT on materials & labour; NIC; Income Tax; Corporation Tax; SDLT… the list goes on & on…): £20million+ (VERY conservative estimate)
Loss of income on ‘associated businesses’ (Solicitors fees; Land Registry; Searches; Planning & LA BC fees; NHBC etc… the list goes on…): £2million+
Loss of associated ‘ongoing’ income – Council Tax, GW&E; Insurance Taxes etc: £2million Y1 and £2million+ p.a.
Loss of ‘associated costs of purchase’ income – taxes etc on carpets/curtains/f&f/…
I think you will see where I’m heading with this. Cost is potentially far outweighed by potential gain.
On the single basis that the Government are providing this money to get it back (with Hope Value of a ‘profit’ element) at some point in the process, and to charge interest on it (Y6 onward) it’s actually a no-brainer that they keep it up.
The actual numbers don’t matter – 1000 was just a nice number to roll with. But the bigger the number the greater the effect, obviously – both in terms of capital and human resource. The building industry is one of the biggest employers in the UK. And therefore one of the most obvious for the Government to support.
I’d suggest that ‘lining the pockets’ of developers is the last thing that the Government set this up for. They are lining their own first and foremost.
As a final point, I’m not sure how it works today – but when NBHTB was first introduced, the developer was required to fund part of the Equity Loan. So the developer had a chunk of skin in the game also.
Perhaps someone with more up-to-date knowledge that mine could advise.
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