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Since the Help to Buy: Equity Loan scheme was launched on 1 April 2013, a total of 158,883 properties have been bought with an equity loan up to the end of 2017.

The latest government figures show that the total value of these loans was £8.27 billion, with the value of the properties sold under the scheme totalling £39.28 billion.

Four out of five purchases (81%) were by first-time buyers accounting for 128,317 homes.

The mean average purchase price of a property bought under the scheme was £247,230, and the mean equity loan was £52,026.

In London, the maximum equity loan was increased from 20% to 40% from February 2016. Since then up until 31 December 2017, there were 6,867 completions in London – the majority (5,546) were made with an equity loan higher than 20%.

For the Help to Buy: NewBuy scheme, 5,694 house purchases were made since the launch of the scheme in March 2012. This scheme closed to new mortgage offers on 8 March 2015.

One in four new housing completions bought with Help to Buy loan

According to research by the Intermediary Mortgage Lenders Association (IMLA), the Help to Buy scheme made up 27% of all new housing completions between April 2013 and March 2017. So its role in helping people get onto the ladder cannot be underestimated, says the trade body.

Kate Davies, executive director of IMLA, commented: “These statistics show that there is still considerable appetite for Help to Buy among first-time buyers. As we approach what is a pivotal juncture for the industry – with the scheme due to come to an end in 2021 – clarity is urgently needed over what will come next.

“The scheme has already helped over 150,000 households into home ownership – and with the government setting itself targets to build a million new homes by 2020, it seems counter-intuitive to close the door on what has been a successful vehicle for helping to purchase those new homes.

Help to Buy should not close in 2021

Davies says it is unclear why Help to Buy should not continue: “Forty three percent of all new build properties are currently dependent on Help to Buy, so the potential effect of any withdrawal would be significant, not just to developers and lenders, but also to consumers who may, in turn, see house prices increase.

“IMLA, along with many industry stakeholders, would welcome an announcement – or at least a firm indication – that some form of government support will continue post-2021.

“We would welcome discussions with government as to what that continuation might look like: some adjustments might be appropriate given the experience to date – but the impact which the scheme has had on new home ownership is surely too significant for it simply to be abandoned at this stage.”

Source: Mortgage Finance Gazette

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